Interim Liberal Leader Bob Rae announced her departure in a release in which he said Fairbairn had served Canada with dignity, pride and devotion for more than four decades.
The 73-year-old former journalist was the focus of considerable controversy earlier this year when it was learned she had continued to vote in the Senate for months despite reports claiming she had been declared legally incompetent last February due to her degenerating mental health.
Fairbairn has been on an extended leave since the summer and will officially leave the Senate on Jan. 18.
"She broke ground throughout her distinguished career as one of the first women journalists in the Parliamentary Press Gallery, senior adviser to Prime Minister (Pierre) Trudeau, and then as the first woman leader of the government in the Senate," Rae said in release Friday.
"She worked tirelessly to help Canadians, especially those facing challenges, particularly through her work on literacy and the Paralympics. And, as she now faces health challenges of her own, she continues to inspire all of us."
Fairbairn, a native of Lethbridge, Alta., worked for Trudeau for 14 years before the then-prime minister appointed her to the Senate in 1984. She served as Senate leader under Jean Chretien's government.
Her departure leaves just four Trudeau-appointed senators still serving, and opens the door for Prime Minister Stephen Harper to appoint one of three senators-elect from Alberta.
Alberta is the only province that has taken up Harper's call to elect potential appointees to the upper chamber.
The Conservatives hold 60 of the Senate's 105 seats, with Harper having made 53 appointments — all Conservative — since coming to office in January 2006.
Note to readers: This is a corrected story. A previous version said Fairbairn had been declared legally incompetent.
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