Embattled Labor Senator Sam Dastyari says he will quit resign after politically damaging revelations about his dealings with a Chinese businessman.

At a news conference on Tuesday, Dastyari said:  "Today, after much reflection, I've decided that the best service I can render to the federal parliamentary Labor Party is to not return to the Senate in 2018."

"I have been guided by my Labor values, which tell me that I should leave if my ongoing presence detracts from the pursuit of Labor's mission," he added, "It is evident to me we are at that point, so I will spare the party any further distraction."

Dastyari already stood down as Labor's Deputy Whip last month after a recording revealed him making pro-Beijing remarks in opposition to Labor's South China Sea policy.  Fairfax Media reported allegations he warned Chinese billionaire Huang Xiangmo about possible surveillance by US agencies.  Last year, Dastyari stood down from Labor's frontbench after he was caught allowing one of Huang's companies to pay a legal bill for his office.

These events pretty much cut short Dastyari's rising star that began with his election in 2013.  Labor leader Bill Shorten said Dastyari "exhibited very poor judgement and he's now paying the heaviest of prices", but ultimately made the "right decision".