TASMANIAN Greens Senator Christine Milne says it is "absolutely the right time" to step down as leader of the party federally, as the Greens go through a generational change.
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The shock resignation may pave the way for Franklin Greens MHA Nick McKim to rise to the Senate, causing a shake-up of the party at a state level.
Senator Milne announced on Wednesday she won't contest the 2016 federal election, and resigned from the leadership effective immediately.
Mr McKim said he would discuss the move with his family before making a decision on pre-selection.
Victorian Senator Richard di Natale was elected leader in a party room ballot, with Larissa Waters and Scott Ludlum elected co-deputies.
"I decided there needs to be generational change both in Tasmania and in terms of the Australian Greens leadership," Senator Milne said.
"I decided now is a very good time for me to be going because the party is in really good shape," she said.
Senator Milne said she was not encouraged to resign, and had achieved what she set out to as leader.
"The Greens have gone from strength to strength with solid election results and a growing, engaged party membership," she said.
Senator Milne said she had not had discussions with possible predecessors.
"I don't even know who is likely to put their hand up," she said.
"I haven't had a discussion with Nick about any of this, he did a great job in the Tasmanian Parliament I have to say.
Mr McKim said he would not be campaigning for preselection through the media.
Senator Milne, 61, said the decision to resign was one she made with her family.
"After 25 years in politics, I am looking forward to spending more time in my beautiful home state of Tasmania, with friends and family, and especially as I am soon to be a grandmother," she said.
The former North-West school teacher has served 25 years in Australian politics.