Peter Hain has stepped down as shadow Welsh secretary.
The veteran MP said he wanted to “explore other challenges” after 16 years on the Labour frontbench - including the Severn barrage project and Africa.
In a letter to Opposition leader Ed Miliband, he said he intended to stay on as an MP and would fight Neath again at the next general election.
But he said that the “thumping victory” at local elections in Wales over which he presided this month provided a suitable moment to step aside.
His move - which he said he alerted Mr Miliband to before Christmas - will add to speculation that the Labour leader is poised to make a wider reshuffle of his top team.
In his resignation letter, Mr Hain - who has held a number of Cabinet roles - said the election results had been a "huge vote of confidence in Labour's vision for the country and for you personally".
"However, as I explained when we met before Christmas, I have wanted for a while to explore other opportunities and I am therefore resigning as shadow secretary of state for Wales to focus on two new challenges."
He said he had been a long-term supporter of the Severn barrage project and wanted to ensure it came to fruition but also wanted to "contribute much more on wider policy issues", notably African development.
Mr Hain was raised in South Africa and first came to prominence as a hardline anti-apartheid campaigner before entering mainstream politics.
He said he would not rule out a return to the front bench should he be asked back in future.
Mr Miliband said: "Peter Hain has made an enormous contribution from the front bench over the past 16 years.
"In government, his ministerial career was extraordinarily diverse, including time in the Foreign Office, the Northern Ireland Office - where he played a crucial role in the Northern Ireland peace process - and at Work and Pensions.
"He also had the distinction of serving as Leader of the House for two years and remains respected across the House as one of our most distinguished parliamentarians.
"He has been a tireless champion of Wales for the past three years as Welsh Secretary and shadow secretary.
"His political campaigning has not just been limited to his time in Parliament. Before becoming an MP he played an important role in the anti-Apartheid struggle in South Africa.
"Most of all, he has been an exceptional colleague and trusted friend both in government and in opposition. He will be a great loss to the shadow cabinet but we know his service to Wales and to the Labour Party will continue for many years to come."
Sources close to Mr Miliband declined to comment on whether Mr Hain's departure would prompt a wider reshuffle of the shadow cabinet.
Welsh Secretary Cheryl Gillan, speaking from Thailand where she is on a five-day trade visit to South East Asia, said: "Peter Hain has had a long and distinguished career covering many departments. We have shadowed each other for many years in both Wales and the Foreign Office and I shall miss him.
"Despite our political differences I know we share a joint ambition of achieving the best for Wales.
"I look forward to working constructively with his successor in furthering Welsh interests."