After 40 years in public life, both as an MP and city councillor, the veteran Vancouver MP said: "It just felt like it's time to call it a day."
The 61-year-old has represented the riding of Vancouver East since 1997, winning six consecutive federal elections.
Her decision is a blow for New Democrats.
She has been a standard-bearer for the left wing of the party and a staunch supporter of the Palestinians in their conflict with Israel.
There has been some speculation that her position on Palestine put her at odds with Tom Mulcair, who has taken a more pro-Israeli stance since becoming NDP leader almost three years ago.
Davies denied there is any friction between her and Mulcair, whom she has served as deputy leader and health critic.
"He has my wholehearted support, he always has, and we work very well together," she said in an interview.
"I've been very proud to be part of his caucus and his team. So, I'm there for him and I will continue to be there for him and do everything I can to help (the NDP win the next election)."
Eighteen years of flying between Vancouver and Ottawa every week when the House of Commons is sitting has been gruelling for Davies, especially since she's something of a white-knuckle flyer.
"That's actually one regret I won't have," she said of the weekly flights.
That said, she added: "I love my job. I mean I totally love it ... I have no regrets that way. I mean, I've just loved every day being an MP."