Key Points:

Minister of Education Steve Maharey, who one said he had lived a "life of blameless excellence", is leaving Cabinet to take up the position of Vice-Chancellor at Massey University.

The announcement today follows months of speculation about the Labour Party minister's interest in the job at the Palmerston North based university, where he was a sociology lecturer prior to entering Parliament in 1990.

Mr Maharey, who is also the electorate MP for Palmerston North, is expected to stay on in the back benches of Parliament until close to the election to avoid the need for a by-election in the electorate - something Labour will be keen to avoid.

It will mean the loss of one of Labour's most high-profile, capable Ministers.

However, the timing of the announcement will open up more options for Prime Minister Helen Clark as she finalises her Cabinet re-shuffle.

The new shape of the Cabinet is expected to be announced within a fortnight and Mr Maharey's decision will give Clark more scope to promote backbench MPs or Ministers outside Cabinet without causing anger in her caucus by demoting existing Ministers.

His political experience in the education sector will be valuable in his new role - he will take over at Massey University as the Government introduces broad reforms to the way the tertiary sector is funded and structured.

Mr Maharey was appointed education minister in December 2005, prior to which he was an education associate minister in charge of tertiary education from 1999 to December 2004.

An employment court hearing in 2001 heard claims from Christine Rankin that Mr Maharey said "he had lived a blameless life of excellence ... until I came along".

The Herald revealed Mr Maharey was expected to get the Massey University job in July. At the time, he did not categorically rule it out but said he was not actively seeking it and had not put in an application.

"As you and I stand here today I am absolutely making that decision, as we all say. I am expecting to stand next year," he said at the time.

As well as education, Steve Maharey is Minister of Broadcasting, Minister of Research, Science and Technology, Minister for Crown Research Institutes and Minister responsible for the Education Review Office.