Sen. Lautenberg's current term expires in 2014.
The 89-year-old lawmaker is the last remaining veteran of World War II in the Senate and has been elected easily five times but was facing a likely challenge from charismatic Newark Mayor Cory Booker.
In a statement issued Thursday afternoon, Lautenberg said "This is not the end of anything, but rather the beginning of a two-year mission to pass new gun safety laws, protect children from toxic chemicals, and create more opportunities for working families in New Jersey."
He went on to say "There is plenty of work to do before the end of this term."
Sen. Lautenberg said he will make a formal announcement on Friday in his hometown of Paterson.
Lautenberg first won election to the Senate in 1982.
The Associated Press contributed to this report