Mr McFall announced his decision to local party members on Friday night
A backbench MP who took charge of the parliamentary inquiry into the collapse of the banking system is to step down.
John McFall, chairman of the Treasury Select Committee, said he would not be contesting the next general election.
The 65-year-old said as he reached a "normal retirement age" it was time for him to move on after 23 years as an MP.
The Labour MP for West Dunbartonshire was recently named Which? Consumer Champion for his efforts to improve financial services for consumers.
Mr McFall was elected as the chairman of the Commons Treasury Select Committee in 2001, before being re-elected to the position in 2005.
In the wake of the banking crisis his committee quizzed high profile figures including Bank of England governor Mervyn King and former Royal Bank of Scotland chief executive Sir Fred Goodwin.
Prime Minister Gordon Brown paid tribute to the politician.
He said: "John has been a champion for Dumbarton for 23 years, served as a minister and, since 2001, a very distinguished chair of the Treasury Select Committee.
"Throughout unprecedented turbulent times, John remained an authoritative voice that emboldened and reassured both Parliament and the British people on how to steer through the recession.
"Parliament and the people of Dunbartonshire will miss his wise counsel."
Chancellor Alistair Darling also paid tribute to Mr McFall - who also served as a minister in the Northern Ireland Office - saying he had made a "tremendous contribution to politics".
Mr Darling said: "I am very sorry John McFall is standing down.
"He passionately and robustly represented his constituents at all times and his services will be greatly missed at Westminster."
Scottish Secretary Jim Murphy also praised Mr McFall, saying: "John had the responsibility of chairing the Treasury Select Committee during the biggest banking crisis since the Second World War.
"His defence of the interests of consumers and families who relied on the banks was passionate, right and absolute.
"He was a man on the right side of so many arguments and someone I respect enormously. I am sure his contribution to Scottish public life will continue."
Mr McFall announced his decision to local party members at a meeting on Friday night.
He said: "After 23 years representing my local area in Westminster and having reached normal retirement age, I see this as a natural time to move on and explore other areas of interest.
"I have been honoured and privileged to represent the Labour and Co-operative Party in West Dunbartonshire and I will continue to pledge my support to its future political success, both locally and nationally."
He also paid tribute to the "dedicated groups and individuals" in his local area that he had worked with.
"I have nothing but the highest regard for all who dedicate themselves to enhancing the quality of life in our local communities," he said.
"It has been my privilege to work alongside them and I wish them well in their continued endeavours on behalf of people in the area."