Perata and many other top state politicians, including Gov. Arnold Schwarzenegger, supported Proposition 93, which would have allowed legislators a chance to keep their jobs longer by allowing them to serve 12 years in one house of the state Legislature.
Current term limits law sets a maximum of six years in the Assembly and eight years in the Senate, for a total of 14 years.
But 53 percent of California voters rejected the measure in Tuesday's election.
In a statement issued by his office today, Perata said he wants to have a process for an "orderly transition of leadership" in order to remove any potential distractions to tackling the state's budget crisis.
Perata said he will remain president pro tem until the end of his term and Senator Darrell Steinberg, D-Sacramento, will be the Senate Democratic caucus's only candidate to succeed him. A formal vote will be taken on Aug. 21.
Perata said, "By removing any questions about the transition of leadership, the caucus will be best equipped to decide on the critical issues confronting our state."
In a statement congratulating Steinberg on being named the new president pro tem, Schwarzenegger said, "I thank Senator Perata for his service in this position for the past three years."
On Aug. 25, 2004, Perata won a three-way contest to become president pro tem. In November of 2004 he succeeded former Senator John Burton, D-San Francisco, who had held the post for six years.
Perata was first elected to public office in 1986, winning a seat on the Alameda County Board of Supervisors that he held for eight years.
He ran unsuccessfully for state controller in 1994, then was elected to the state Assembly in 1996 and to the state Senate in 1998.
