Perry has served as governor since 2000, when then-Gov. George W. Bush (R) became president. Perry was elected to full terms in 2002, 2006 and 2010.
Perry also alluded to a potential 2016 presidential run, saying he will “pray and reflect and work to determine my own future path."
Since his 2012 presidential bid floundered – capped off by his “oops” moment at a presidential debate -- Perry has eyed a second run.
"Any future considerations I will announce in due time, and I will arrive at that decision appropriately," he said.
For now, though, he said he will focus intently on his final 18 months as governor.
"After January of 2015, new chapters will be written. New leaders will write them," Perry said. "But the focus must remain on the greatest state in the nation and opportunity for her people'
Perry's announcement came at an elaborate press conference at a Caterpillar plant. A campaign-style video recapped Perry's accomplishments as governor, before the governor himself made his case for why his tenure has been a success.
State Attorney General Greg Abbott is considered the GOP frontrunner now that Perry is out of the race.
Democrats may try to recruit San Antonio Mayor Julian Castro or state Sen. Wendy Davis -- who recently earned national recognition for filibustering an abortion restrictions bill favored by Perry and the GOP -- but the Democratic bench remains thin and Texas remains a red state. Castro is already seeking reelection in 2013, complicating any gubernatorial campaign.