Wall considered legal action against the party's ruling New Zealand Council for allowing one of her challengers, Arena Williams, to submit a late nomination.
Wall today said events during the 2020 general election had prompted her resignation.
Her supporters negotiated a deal at the time.
The deal involved Wall getting a winnable position on Labour's list and possible help finding a good appointment in the current term to help her exit from Parliament.
"It's been an honour to represent and provide a voice in Parliament to those who are so often unheard," Wall said in the statement.
"It was a privilege to lead the marriage equality law change," she added.
"Not being able to get married to the person you loved unfairly marginalised members of the rainbow community and was unjust."
She said she loved working as a parliamentarian and enjoyed building relationships with MPs from other parties.
"Most recently I've thoroughly enjoyed my role as co-chair of the Inter-parliamentary Alliance on China and advocating for human rights."
Wall said she'd stay involved with indigenous rights, human rights, equality and the rights of women and the LGBTQI+ community.
She will make her farewell valedictory speech at Parliament on April 14.
Prime Minister Jacinda Ardern said Wall was a hero to many throughout her parliamentary career.
"Her commitment to human rights and equality has been absolutely unwavering. She has been relentless in her pursuit of human rights for all," Ardern said.
The most likely person to replace Wall in Parliament is Lemauga Lydia Sosene, who is next on Labour's list.
Sosene is chairwoman of Auckland Council's Māngere-Ōtāhuhu Local Board.
If Sosene decides not to go to Parliament, the next in line is former army officer Dan Rosewarne, of Waimakariri, Canterbury.
'Maverick' MP
Act leader David Seymour praised the Labour MP today.
"I love Louisa Wall. She's a colourful maverick, the kind of person every Parliament needs."
He said Labour had trouble with Wall.
"I don't understand enough about the Labour Party's internal workings but I think it's a pity that someone who stands up for what she believes in hasn't found a place within Labour's culture."
Seymour said he enjoyed working with Wall at different times and he wished her the best for her future.
