9NEWS confirmed that Ritter's staff learned of his decision on Tuesday.
Ritter, 53, appeared at a press conference beside Lt. Gov. Barbara O'Brien Wednesday to confirm his decision.
O'Brien released a statement shortly after the announcement detailing her plans.
"I am proud to have been a part of the Ritter-O'Brien team and all that we have accomplished, but have made the personal decision not to pursue election either," she said in a release.
Ritter cited family as the primary reason he would not seek re-election.
"I would say it this way; I haven't found the proper balance where my family is concerned. I've not made them the priority that they should be. So, today I'm announcing the ending of one of my roles. I'm no longer going to be a candidate for re-election in 2010," Ritter said.
Ritter says he still has a son in college and two children at home. He called the decision "intensely personal" and says he needs to be there for his wife and family.
"So while this decision allows me to make my family a priority it also allows me to focus on keeping the state budget balanced and keeping Colorado on the road to recovery," Ritter said.
"I would say it this way: I haven't found the proper balance where my family is concerned," he said.
"Nobody's ever pressured me to not run," Ritter said. "By not running for re-election, I'll be able to make the tough and unpopular decisions that need to be made."
Ritter was humble about his decision to step down, acknowledging those who helped him get elected.
"When people elect you they give you, as I said before, an honor and a privilege and I would just thank Coloradans again for that opportunity," he said.
Ritter's wife, Jeannie, praised her husband.
"It's really his decision. I'm really proud of him," she said.
Ritter also thanked and praised his staff for their dedication.
"I want to thank the people who are part of my campaign staff and have given tirelessly for that," he said.
Ritter said he believes the election was winnable, and thinks the Democrats will retain the governor's seat.
"You know I've seen polls that say various things but it's a long way to this election and I felt that the election was absolutely winnable. And I think it's winnable by any other candidate that decides to get in," Ritter said.
Sources have told 9NEWS Ritter's internal polling has shown him down 7 to 9 points against the leading GOP candidate former Congressman Scott McInnis.
Secretary of the Interior Ken Salazar released a statement moments after the announcement.
"Bill Ritter has been a devoted servant of the public at great sacrifice to self and family," Salazar stated in a release. "I have enjoyed our work together during my time as Attorney General, United States Senator and Secretary of the Interior. I wish him and his family all the best and thank him for his service."
The "Atlantic Monthly" is reporting that the White House is encouraging Interior Secretary Ken Salazar to run in Colorado's 2010 gubernatorial race.
President Barack Obama also wished Ritter the best.
"He leaves behind an extraordinary record of accomplishments - establishing himself as a national education reform leader, building a new energy economy, expanding health care to those in need, and rebuilding Colorado's infrastructure," Obama said in a prepared statement.
Additionally, sources tell 9NEWS that Salazar's brother, Rep. John Salazar (D-Colo.), has told close friends he believes his brother will run for governor.
9NEWS Political Analyst Floyd Ciruli has said that should Sec. Salazar run for governor he would likely not have any challengers within his party.
Denver Mayor John Hickenlooper told reporters he would decide if he'd enter the race within a week. Hickenlooper said he would defer to Salazar and would not challenge him if he decided to run.
"I think Ken Salazar has created a lifetime of public service, a career of doing what he thinks is right for the state of Colorado and now for the United States. He has earned not only my respect and admiration but also my deference," Hickenlooper said. "If this is something he wants to go and put his heart and soul into, I will do everything I can to help him get elected."
Last night, prior to Ritter's announcement, Colorado House Speaker Terrance Carroll initially told 9NEWS, "I'm speechless."
"If this news is true, I'm disappointed," Carroll said later in a statement. "I'm confident that a Democrat will be elected to the governor's office in November. The next 10 months will be an opportunity to focus on issues that matter most to Colorado's families: jobs, the economy, and fiscal responsibility. None of this changes what we're doing to put Colorado back on the road to recovery."
Ritter was one of several Democratic incumbents facing tough challenges in 2010 because of the economy and the problems balancing the state's budget.
"It doesn't come as a surprise. The Democratic Party nationally is suffering. Republicans have a fantastic chance in 2010, regardless who the Democratic power brokers drag up," State Senate Minority Leader Josh Penry (R-Grand Junction) told 9NEWS. "It's been a quiet chatter for months."
If Ritter had lost in the fall, he would have become the first incumbent governor to lose re-election in Colorado since 1974.
Ritter, still in his first term, was elected in 2006 as Colorado swung more toward the Democrats' side of the aisle and away from the right.
Many have considered Ritter a rising star in the Democratic Party.
Aside from Salazar, other potential Democratic candidates to fill Ritter's shoes are Hickenlooper and Andrew Romanoff, a former state legislator. Romanoff is currently challenging Democratic Sen. Michael Bennet for the party's U.S. Senate nomination.
When asked if he would run on Tuesday night, Hickenlooper sent an e-mail to 9NEWS that said, "Sorry, my battery is running down."
Romanoff released a statement on Wednesday, but did not address whether he would run
"I have known Bill and Jeannie Ritter for more than 16 years, and I appreciate how much they and their children have sacrificed for the sake of our state. I join all Coloradans in thanking the governor and his family for their selfless service - and in wishing them the very best in the years ahead," Romanoff said.
Another Democrat who could throw his hat in the ring is Rep. Ed Perlmutter (D-Colorado).
Two Republicans are seeking the GOP nomination: Scott McInnis and businessman Dan Maes.
McInnis Campaign Press Secretary Sean Duffy told 9NEWS Tuesday night, "Scott McInnis' strong message of job creation and economic opportunity clearly has resonated with voters and apparently the top of the Democratic ticket is falling tonight. Scott is ready for whomever the replacement may be because he will unite Colorado behind solid innovative job recovery policies."
Colorado Senate President Brandon Shaffer released a statement that said, "We will change quarterbacks next season, and today we field a first-rate team. We're suited and ready with a full legislative agenda to bring good jobs, better health care and a first-class education system to Colorado."
As the dean of the delegation, Rep. Diana Degette (D-Colorado), along with Waak, plans to call a meeting of the senior elected Democrats Wednesday to discuss how to go forward as a party.
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