His decision set off a scramble for succession.
Attorney General Christine Gregoire, a Locke ally, quickly announced she will seek the Democratic nomination next year and others in both parties were eying the state's top political post.
Locke's decision, a big surprise in some quarters, will touch off the busiest campaign season in a long time, led by the free-for-all for governor, attorney general, Congress and other posts that open up.
"The big domino has fallen," said state GOP Chairman Chris Vance.
Locke, 53, the country's first Chinese-American governor and the Democrats' choice to answer President Bush's State of the Union Address last January, cited family considerations in his decision.
"It came down to `We want a normal life,"' and more time to spend with youngsters Emily, 6, and Dylan, 4, the governor told The Associated Press.
Locke said he wrestled with the decision for weeks, going back and forth.
"I really love this job and there is so much more to be done," he said, calling the governor's office the opportunity of a lifetime.
In the end, said his wife, Mona Lee Locke, "He put family first. What more can you ask for? I feel really fortunate.
"It's more than a job - it's his life."
Locke said he and his wife made the decision Sunday. Gregoire said Locke phoned her from the mansion's front lawn Sunday night as he and his family watched the Lakefair fireworks over Budd Inlet. He told Gregoire the family tableau strengthened his resolve to head home to Seattle, where the Lockes have a home on Queen Anne Hill.
On Monday morning, he choked up when he broke the news to his staff. "We want to be a normal family," he told them. Locke also asked his cabinet not to let down. "We've got a year and a half to go and we want to put the pedal to the metal."
Aides said former President Clinton, some of Locke's fellow Democratic governors, business leaders and others had urged him to run again.
In a joint interview in the family living room of the 32-room mansion, the Lockes said it was a tough decision, balancing career goals and family needs.
"We really wrestled with it," he said.
Both were teary, but Locke said he has no second thoughts about stepping away from power.
In a message to citizens, he said, "As profoundly important as it is to be your governor, it is just as important to me to be a good husband and father."
The Lockes said they want to get their children settled into Seattle schools, rather than disrupt them four years later. "We didn't want Emily starting middle school with no grade school buddies," Locke said.
In the interview, Locke said he has no idea what his next career might be. He has been mentioned as a foundation or university president; working in a major law or investment company; or working in international development for Microsoft, Boeing or other corporation giant.
"I don't know where people get all that," he said with a laugh. He said he threw away a solicitation to apply for the University of Washington presidency and hasn't had conversations about future employment anywhere.
He didn't rule out a return to politics someday.
"I've never believed in plotting a political career," he added. He said he'll stay active as a private citizen. "I'm not going to fade away from public policy issues."
The normal political career path - on to the U.S. Senate - apparently is blocked for years by the incumbency of two Democrats, Patty Murray and Maria Cantwell. Locke indicated Monday he's not interested in a Washington, D.C., job anyway.
"This Washington is my home," he said firmly.
Locke said polls showed him with "very, very strong numbers" and that he's sure he could have been re-elected.
By the time Locke completes his second four-year term in January 2005, he will have been in elective office 22 years - 11 in the state House, three as King County executive and eight as governor.
Locke is chairman of the Democratic Governors' Association and next summer will host the National Governors' Association summer conference in Seattle.
Iowa Gov. Tom Vilsack, his vice chairman, said Locke has served the state and country "skillfully and with unparalleled energy."
Locke's compelling personal story has drawn him national attention. He was born to Chinese immigrant parents and lived in the Seattle housing projects. He eventually made it to Yale and Boston University law school, and came home to begin a career as a prosecutor, lawmaker and public official.
Locke's departure touched off a feeding frenzy Monday.
Within minutes of his announcement, Gregoire jumped into the race.
"I intend to run," she said in an interview. "I consider myself a visionary, looking to the future. I'm ready to make the tough decisions."
Former Supreme Court Justice Phil Talmadge, already running, welcomed others to the primary field, although he chided them for waiting until Locke made his decision.
King County Executive Ron Sims said he hopes to decide by next week. U.S. Rep. Jay Inslee and Snohomish County Executive Bob Drewel are mentioned as possible Democratic candidates.
With the popular incumbent's departure, Republicans see a chance to reclaim the governor's mansion for the first time since the 1980 election. Among Republicans, former Microsoft executive Bob Herbold, state Senate budget Chairman Dino Rossi and King County Councilman Rob McKenna have discussed running.