Labour MP Phil Twyford will not seek nomination for the Mt Albert by-election, resolving the party's Tizard dilemma.
Mr Twyford, a list MP, said standing aside for a candidate from outside Parliament would allow a further "injection of renewal".
Had Mr Twyford won the seat the next on the party list, Judith Tizard, would have returned to Parliament.
This "Vote Twyford, get Tizard" scenario was portrayed as a problem for Labour, particularly by right-wing blogs.
Labour leader Phil Goff was initially reticent when asked if he wanted Ms Tizard back and the party used a polling company to test voter feelings on her re-entering Parliament.
Mr Twyford has lived in Kingsland for 20 years, and was favoured to take over the seat from Helen Clark until the Tizard dilemma was raised.
There is a view that Labour's party hierarchy placed too much emphasis on the effect of Mrs Tizard's return, to the detriment of Mr Twyford.
Labour leader Phil Goff said the party had not panicked, but rather was unsure how the electorate would react to voting for someone who was already in Parliament and getting someone else.
Mr Goff said this could now be a factor for National, as its favourite for the candidacy is list MP Melissa Lee who would bring in list candidate Cam Calder if she won.
Mr Twyford issued a statement saying he would help the campaign in Mt Albert, which was "Labour heartland".
"I am already a member of Parliament. If someone from outside stands and wins Mt Albert we get another injection of renewal, adding to the 13 new Labour MPs elected in the last year," he said.
Labour's nominations close tomorrow. Political studies tutor Meg Bates, lawyer Helen White and AUT lecturer Hamish McCracken are confirmed, but Mr Goff believed there were up to a dozen nominations.
Twyford's list decision closes door on Tizard
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