"This has been the product of much soul-searching for us as a family over the last few months," Rudd said. "The decision that I have made has not been taken lightly. But for me, my family is everything, always has been, always will be, which is why I will not be continuing as a member of this Parliament beyond this week."
He wished Abbott luck, commenting that the office of prime minister was "hardest job in the land," Australian Broadcasting Corp. reported.
"I wish Tony, his wife Margie and their family all the best for the rigors of high office that inevitably lie ahead," Rudd said.
Abbott said Rudd's retirement was a significant event in the history of Australia's Parliament.
"To lose someone who has been one of the big figures in this Parliament and one of the big figures in the life, the public life of our country over the best part of two decades," the prime minster said.
On his side of the aisle, Rudd noted fellow Labor member Opposition Leader Bill Shorten when thanking supporters.
"Having served as leader of the opposition myself, this is never a position for the faint-hearted," Rudd said. "There are always long dark nights of the soul but believe it or not, morning does come, often sooner than you think."
Shorten said Rudd's protection of the Australian economy was a key achievement and spoke of his popularity with the Australian people.
"I do not believe that we will see his like again in the Australian Parliament," he said.
However, Shorten noted intraparty feuding cost Rudd and Gillard their positions, but following a poor election showing the party emerged "more united, stronger, and more cohesive."
He said he wanted to remain active in the international community.
"I am passionately Australian and passionately a citizen of the world," Rudd said. "I intend to be active in the international community in areas where I can make a genuine contribution to peace and stability, global economic governance and sustainable development, including climate change."
Rudd closed his remarks with his signature sign-off, ABC said.
"On this final occasion in the Parliament," Rudd said, "and as is now officially recorded in the classics for occasions such as this, it really is time for me to zip."