Patricia Hewitt has resigned from the government for "personal reasons".
The health secretary quit on Wednesday night as Gordon Brown was working on the first cabinet of his new government.
Hewitt was widely expected to be removed from the post by the new prime minister after presiding over a difficult period for the NHS and losing the confidence of its staff.
But Hewitt said that while Brown had asked her to stay on in office, she wished to spend more time with her "constituency and family" and that it was the "right moment" to go.
She has also agreed to chair a "manifesto committee" to develop Labour policy on Europe.
Brown thanked her for her "outstanding contribution" to the government, in which she also served as trade secretary, minister of state for industry and a junior Treasury minister.
Although only elected as MP for Leicester West in 1997, Hewitt was already a big hitter in the Labour Party, having been former leader Neil Kinnock's press secretary in the 1980s.
A close ally of Tony Blair's, she entered the cabinet after the 2001 general election taking on the trade and industry brief.
There she sought make the DTI more business friendly, as well as introducing new maternity and paternity leave rights.
Having overseen the government response to the collapse of the Rover car manufacturer in 2005, she moved the Department of Health following the general election of that year.
She immediately sought to reverse a decision to exempt some pubs and private clubs from the forthcoming smoking ban, eventually succeeding after first having to defend the compromise in the Commons.
However she soon ran into trouble with her boast that the NHS was enjoying its "best ever" year, despite trusts running up record debts and being forced to lay off some staff and services.
