The high-profile opposition MP insisted he didn't have a job finalised at a press conference on Tuesday but would not be having a tilt at federal politics at the upcoming election.
"I intend to pursue a career in the public sector ... I've been thinking about this for some time," he said standing alongside his partner and young son.
Mr Kean, who previously worked as the former energy minister in the Liberal government led by Dominic Perrottet, said he was looking at pursuing a career in the energy and climate change industry.
"I feel I made significant changes - positive changes - in the energy policy as the minister for energy so I intend on continuing to try and make an impact in the energy industry in the private sector," he said.
"I'll have discussions that I'm looking forward to, opportunities that might come in the private sector to drive the energy transition."
Asked if he would run for federal parliament at the next election, the long-running MP ruled out running for next year but did not rule out running in years to come.
Speculation over recent weeks had suggested senior Liberal figures were courting Mr Kean for a potential run at a federal seat.
Mr Kean, who has been an MP for 13 years, said he continued to passionately believe in the Liberal party and it's values of "freedom, enterprise, opportunity and prosperity".
"Values that are fundamentally the values that have not only made the Liberal Party great, but the values that have made our country great," he said."
Mr Kean will stand down before parliament returns in August after making the decision to leave politics over the weekend.
"We've been talking about public life, we've been talking about (the) strain that places on our family and we've come to a conclusion recently that I want to pursue opportunities in the private sector," he said.
The announcement comes the day of the NSW budget delivery, just hours after Treasurer Daniel Mookhey handed down his second budget.
Mr Kean used his retirement announcement to accuse his successor of delivering "the worst NSW budget in modern history".
"Nothing can overshadow Daniel Mookhey's shocking budget ... a decade of deficits is what he's delivered," he said.
Mr Kean was elected as the member for Hornsby in Sydney's north in the coalition's 2011 landslide election win.
He was appointed by former premier Gladys Berejiklian to the environment portfolio before being handed responsibility for energy and climate.
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