The former premier said she would not contest her seat of Bendigo East at the Victorian election in November at a surprise press conference on Friday morning.
Her resignation had been widely expected since she stepped down as premier in July, after a delegation of MPs told her she had lost the support of the Labor caucus, elevating her deputy Ben Carroll.
Ms Allan said much had changed, both personally and politically, since she first won election in 1999, the youngest female MP elected to Victorian parliament at just 25.
"I became a wife. A mum. A Minister. A Deputy Premier. And Premier of the greatest state in the country," she wrote on social media, after breaking the news in her hometown of Bendigo.
"I have had Yorick, Peggy and Cormac by my side. My greatest supporters and my greatest joy."
She said her tenure had not always been easy but insisted her values, instilled by her parents and regional community, remained unchanged.
"There were extraordinary days. There were bloody hard ones too," she said.
"But through all of it, I never forgot who sent me there - or why."
She said she would leave politics the same way she entered.
"A daughter of Bendigo. A daughter of workers. A proud Labor woman," Ms Allan said.
"Still believing in equality. Still believing in public education and public health. Still believing in the dignity of work."
Mr Carroll said his predecessor's career was defined by her commitment to regional Victoria.
"For 27 years, Jacinta Allan has poured her heart into the community she loves," he said in a statement on Friday.
"Jacinta's service has always been grounded in a simple belief: that people in regional Victoria deserve the same opportunities as those in our biggest cities."
Mr Carroll, who used his first speech as premier to insist "I am not Daniel Andrews. I am not Jacinta Allan," said he planned to honour Ms Allan's legacy by carrying on her work for Bendigo.
"Labor remains firmly focused on backing Bendigo and delivering for regional communities right across Victoria," he said.
Planning Minister Sonya Kilkenny, a long-time ally of Ms Allan's, replied to her announcement on Instagram, writing: "Thank you JA. You made a difference ."
Ms Allan was appointed Daniel Andrews' successor when he retired in September 2023 after he led Labor to election victories in 2014, 2018 and 2022.
She had been been slated to go head-to-head with Liberal leader Jess Wilson at the ballot box in four months until a leadership spill on July 28.
Her departure paves the way for a new candidate to face off against with Nationals candidate for Bendigo East, publican Andrew Lethlean.
Ms Allan has had many accomplishments over her political career, including building major projects, removing level crossings, strengthening anti-hate laws, signing a treaty with Aboriginal Victorians, and overhauling planning laws to promote construction of housing.
Although her political legacy may be complicated by overseeing Victorian Labor's Big Build program as transport infrastructure minister from 2018 to 2023.
Widespread corruption allegations within Victoria's construction sector, including on government worksites, have been aired during the course of a Queensland inquiry and in media reporting.
Ms Allan previously said her government cracked down immediately when made aware of union misconduct allegations in mid-2024, but she refused to call a royal commission.
Her successor, Mr Carroll was quick to announce a royal commission, although is yet to publicly announce the terms of reference.
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