"In congratulating Premier Nathan Rees and acknowledging the challenges ahead, I have decided not to contest the ballot for a position in the new Labor ministry," Ms Meagher said today.
"I have devoted more than 20 years to the Australian Labor Party, and I have always done what's in the best interests of the ALP and government.
"I won't be seeking a position in the new cabinet and wish my colleagues all the best in the lead-up to the next election."
Ms Meagher was one of a list of ministers former premier Morris Iemma had planned to axe from his front bench this week.
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Join Simon Benson's blog: Why Labor dumped Iemma Join Malcolm Farr's blog: NSW Labor's stained legacyOpposition Leader Barry O'Farrell today renewed his oft-repeated calls for the embattled health minister to be sacked.
In her parting statement Ms Meagher reiterated her support for the controversial electricity sell-off that divided the Government in recent months.
"I was a strong and vocal advocate for the reform of the NSW energy sector, because as minister for health I was acutely aware of the need for investment in new public hospitals," she said.
"There are major challenges facing the health system but I want to praise our doctors, nurses and paramedics who are on the frontline everyday doing their very best.
"It's been my honour to meet and work with such dedicated and compassionate people."
Ms Meagher said she remained committed to the people in her electorate of Cabramatta.
The State Opposition's health spokeswoman Jillian Skinner said Ms Meagher would go down as the worst health minister NSW had ever seen.
"Reba Meagher leaves the health system in a worse position than when she took it over 18 months ago," Mrs Skinner said.
"The sad reality for the people of NSW is regardless of who is minister, the Labor Government can't be trusted to fix the health system.
"After 13 years, Labor has demonstrated itself incapable of improving basic health services," she said.
