The former chancellor said he would give up the Tatton seat he has held for 16 years but would carry on “fighting for that Britain I love” in his new role as editor of the Evening Standard newspaper.
However, he hinted that he may one day return to the political front line, saying he was leaving Westminster “for now”.
In a letter to the Conservatives in his Tatton constituency, he said: “I am stepping down from the House of Commons – for now. But I will remain active in the debate about our country’s future and on the issues I care about, like the success of the Northern Powerhouse.
“I want a Britain that is free, open, diverse and works with other nations to defend our democratic values in the world.
“I will go on fighting for that Britain I love from the editor’s chair of a great newspaper. It’s still too early to be writing my memoirs.”
He had been under pressure to stand down over a conflict of interests between his job as MP and the many other roles he has taken on since he was sacked from the Cabinet by Theresa May.
An election made the idea that Mr Osborne could retain his role as MP at the same time as editing a newspaper untenable.
Sky News Senior Political Correspondent Beth Rigby said: “Osborne was waiting in wings for Theresa May to fail on Brexit. A snap election makes that outcome a lot less likely. Bowing out for now makes sense.”
Tatton Conservatives member Tony Dean said: “I think the general feeling will be that he’s fallen on his sword a bit – but he’s done the right thing in not seeking re-election.
“He was a good local MP and of course he was powerful. People always want their MP to have a bit of authority, and as chancellor he certainly had that.”
Mr Osborne, who is due to take up his newspaper job on May 2, also earns £640,000 a year for one day a week as an advisor at fund manager BlackRock.
In the last year he has made £800,000 from 15 speaking engagements, including at City and Wall Street banks.
He also receives a £120,212 annual allowance as Kissinger fellow at the McCain Institute and has an unpaid role as the chairman of the Northern Powerhouse Partnership.
Mr Osborne is under investigation by the Advisory Committee on Business Appointments over whether he received parliamentary approval to take on the Evening Standard role before accepting the job.
His decision has also triggered a review on MPs and second jobs by the Committee on Standards in Public Life.
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