Dorgan, who was first elected to the Senate in 1992 after serving a dozen years in the U.S. House, said he reached the decision after discussing his future with family over the holidays.
The moderate Democrat said he has other interests he wants to pursue.
"Let me be clear that this decision does not relate to any dissatisfaction that I have about serving in the Senate," he said in a statement. "Yes, I wish there was less rancor and more bipartisanship in the U.S. Senate these days. But still, it is a great privilege to serve and I have the utmost respect for all of the men and women with whom I serve."
Republican Gov. John Hoeven has been mulling a possible challenge to Dorgan and the veteran lawmaker's retirement could clear the path for the popular governor. Democratic Rep. Earl Pomeroy could be interested in seeking the seat.
Dorgan was going to face a stiff challenge from Hoeven, according to CBS News' Chief Political Consultant Marc Ambinder.
"Hoeven will now almost certainly run; it's hard not to assume that, absent a stellar candidate, Republicans will pick up this Senate seat," he said.