Moroney said she had been told last night she had lost support from the party's ruling council for an electable position on the list ahead of September's election.
Labour had already confirmed its candidates to run in all 71 seats, and Moroney's decision means it will need to hold a new selection in Hamilton West, where she was to have run.
Moroney, who entered Parliament in 2005, said she would serve out the remainder of the Parliamentary term.
"I am grateful that I have had the opportunity to fight for the rights of children, working families, women and the people of Hamilton.
"I'm proud to have extended paid parental leave, achieved mandated meal breaks and rest periods for workers and fought early childhood education cuts amongst other things."
Moroney said she looked forward to spending more time with her family and friends, and to "plan the next chapter of my life in pursuing equality and social justice".
The overall percentage of party vote and number of seats won determines how many candidates are elected from a party's list.
Labour is expected to announce its list rankings tomorrow, National in late June or July. Neither Prime Minister Bill English or Labour leader Andrew Little are contesting electorates and will be number one on their party's list.
Little said he understood Moroney's reasons for standing down, and paid tribute to her work ethic and successes in areas like paid parental leave.
Labour is expected to announce its list rankings tomorrow, having confirmed its candidates.
Those to watch include Deborah Russell, a tax expert at Massey University who has replaced former leader David Cunliffe in New Lynn. She will battle lawyer Paulo Garcia in what is a relatively safe Labour seat, though the party's majority has been eroded by boundary changes.
The party also rates its Tauranga candidate Jan Tinetti, principal of the Decile 1 Merivale School, which has 98 per cent Maori roll. However, she is likely to be focused mostly on the party vote because she is up against National's Simon Bridges, who won by 15,000 votes in 2014.
Wellington deputy mayor Paul Eagle is set to enter Parliament after replacing Labour's former deputy leader Annette King in Rongotai, a relatively safe seat.
Labour will feel they have a chance in a couple of marginal seats, including Maungakiekie. In Ohariu, one of the closest races in the 2014 election, new Labour candidate former Police Association head Greg O'Connor could unseat long-serving United Future leader Peter Dunne. The Green Party has pulled its candidate to give Labour a clear run.
Auckland Central was the closest seat in 2014, but Jacinda Ardern has left and National's Nikki Kaye has risen in profile following her breast cancer battle and promotion to Education Minister. Employment lawyer Helen White will stand for Labour.
The party is vulnerable in Hutt South, where veteran MP Trevor Mallard was run close by National's young, rising star Chris Bishop in 2014. Mallard has gone list-only and has been replaced by Virginia Andersen, who put up a strong fight against Dunne in Ohariu in 2014.
Labour's six MPs in Maori seats have opted to go off the list and stake their re-election on winning their electorate.
Those seats are unpredictable because of a newly-formed alliance between the Maori Party and Mana and the Kingitanga Movement's endorsement of the Maori Party.
Labour's Kelvin Davis could face a strong challenge from Mana's Hone Harawira in Te Tai Tokerau, where the Maori Party has agreed not to run a candidate.
