OTTAWA — Liberal party stalwart Bill Graham has announced his impending retirement from federal politics and paved the way for former Ontario premier Bob Rae to seek his Toronto seat.

A onetime cabinet minister and interim Liberal leader, Graham informed the executive of his Toronto Centre riding association Thursday that he will not run in the next election.

He told the gathering that party leader Stephane Dion had informed him that the nomination race will be an open one. A vote by the local grassroots, expected in April, will decide the Liberal candidate for the next election.

Rae, the former NDP premier of Ontario who finished third in the Liberal leadership race, attended the meeting and appeared certain to seek the nomination.

"Whoever we nominate . . . I'll be with you to ensure this riding stays Liberal,'' Graham told the Toronto audience.

Rae lauded Graham's contribution to public life and confirmed he will make an announcement soon about his own political career.

"(Graham) has been a great representative of Toronto Centre ... and a terrific minister. Today is certainly not about speculation, it is about Bill,'' Rae told The Canadian Press in an e-mail.

"I shall be making my intentions known in the very near future.''

Party insiders said they expected Rae to announce almost immediately his intention to run.

Rumours of Graham's impending retirement have swirled around for years, spanning two election campaigns.

He was first elected in 1993 and served as minister of foreign affairs and later national defence before becoming the party's interim leader for almost an entire year after the 2006 election.

Numerous Liberals have jealously eyed his seat, considered one of the safest and most highly coveted Liberal ridings in the country. Graham held the seat by more than 14,000 votes over the second-place NDP candidate in the last election.

Liberal sources say that both Rae and Martha Hall Findlay wanted the seat, but that Hall Findlay would get another one in the Toronto area. They said she would seek the Willowdale nomination if ex-cabinet minister Jim Peterson chose not to run.

Hall Findlay would not comment on her prospects of running in Willowdale.

She also had high praise for Graham, noting that before politics he had already achieved success as a lawyer and university professor, and as head of Toronto's Alliance Francaise who won a handful of prizes for promoting the French language and culture.

"He has made a huge contribution and I have so much respect for him,'' Hall Findlay said in an interview.

"He has contributed to public office with integrity . . . and his interest in politics was born out of a clear desire to contribute to public policy.''

It was not yet clear whether Findlay would also need to fight a nomination battle or simply be granted a riding without contest.

She had already won a nomination in the Toronto area -- but lost it to Belinda Stronach in 2005 when she defected to the Liberal party.

Some Liberals had speculated Rae would need to be parachuted in, because other potential candidates have spent months organizing and selling memberships.

One such candidate -- Toronto lawyer Meredith Cartwright -- had even begun an online petition asking party leader Stephane Dion to allow an open nomination contest.

Another potential candidate is Rob Oliphant, a United Church minister with deep roots in the party.

The onetime adviser to ex-Ontario premier David Peterson has worked on a variety of local Liberal campaigns, and most recently supported Michael Ignatieff's second-place leadership bid.

Oliphant will meet with a team of supporters on Sunday to "assess the situation'' regarding his own bid, one of his organizers said.