He is now throwing his support behind David Shearer.
The decision leaves David Cunliffe and Mr Shearer in contention for the leader role.
Shane Jones is yet to decide whether or not he will put his hand up for the job.
Mr Parker says he remains committed to Labour ideals and will endeavour to work hard to achieve them for New Zealanders and the country.
"There is growing support for a new face to lead the Labour Party. I intend to support David Shearer in his bid."
Read more: http://www.3news.co.nz/David-Parker-pulls-out-of-Labour-leader-race/tabid/419/articleID/234913/Default.aspx#ixzz1fKouHUBx