Shumlin broke the news at a Monday afternoon news conference and promised to focus on his goals for the state in the last 18 months of his term.
The Democratic governor said he intends to leave politics entirely, noting he plans to go back to work at his family's business in Putney after leaving office in January 2017.
"This is not driven by poll numbers; this is not driven by politics," Shumlin, 59, said. "I decided to make this decision now because I want these next 18 months in office to be focused entirely on continuing the work we started together."
Shumlin said his announcement would allow staff to work without worrying about politics. But Democratic and Republican primaries are sure to fuel plenty of speculation.