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The announcement from Mr. Harkin, 73, sets the stage for one of the most competitive Senate races in the country next year. It will be a key battleground in the Republican Party's quest to win control of the chamber from Democrats.

"To walk away from this position and this power is not an easy thing," Mr. Harkin told The Des Moines Register on Saturday. "But I think it's the right thing. And I have two years left. I'm not passing the torch sitting down, it's a running relay. I intend to be very active over the next two years."

In a career spanning four decades in Washington, Mr. Harkin pushed for the passage of the Americans with Disabilities Act in 1990 and was a leading voice in the overhauling of the nation's health care system. He sought the Democratic presidential nomination in 1992.

The announcement from Mr. Harkin took many Democrats by surprise, particularly those in Iowa who had assumed he would seek re-election in 2014. His is the latest in a series of retirements, forcing Democrats to try to defend an open seat.

"I appreciate that Senator Harkin has made this decision so early in the cycle, giving us ample time to recruit a strong Democratic candidate for this seat," said Senator Michael Bennet of Colorado, chairman of the Democratic Senatorial Campaign Committee. "Iowa has a strong record of electing great Democrats and I'm confident that we will elect a new Democratic senator next November."

Representative Bruce Braley, Democrat of Iowa, is among the early prospects for the seat. He had been considering running for governor, but Mr. Harkin's retirement gives him more options.

Republicans, who need to pick up six seats to win control of the Senate, will probably have a wide field of candidates, including Representative Steve King, who is among the most vocal opponents of an overhaul to the immigration system.

The Iowa race will be an early test for Republicans as the party tries to rebuild and recruit candidates who have a wide appeal to voters.

In defending their control of the Senate, Democrats now face open seats in Iowa, Massachusetts and West Virginia. Iowa is a classic swing state, which President Obama carried in 2008 and 2012, but it has a Republican as its governor, Terry E. Branstad, and as its senior senator, Charles E. Grassley.