McGowan has been in the top job for six years and served as opposition leader for five years before being elected premier.
In his speech, McGowan said while he had loved being able to deliver for the benefit of the state and loved the challenge of solving problems, the truth was he was tired.
"The role of political leadership doesn't stop, it is relentless and comes with huge responsibility that is all consuming, each and every day [and] combined with the COVID-19 years, it's taken it out of me," he said.
"I'm convinced that WA Labor can, and will, win the next election in 2025 but, I just don't have the energy or drive that's required to continue in the role as premier."
Chamber of Minerals and Energy of WA chief executive officer Rebecca Tomkinson said the premier had made significant contributions to WA since taking the top job in 2017.
"On behalf of CME and its members, I congratulate the premier on his successful tenure as WA's leader and thank him for his support of the WA mining and resources industry, particularly during the COVID-19 period," she said.
"Throughout COVID-19, the collaboration between industry and the WA government enabled critical sectors like resources to continue to operate whilst protecting the safety and health of the workforce and community [and] this helped the WA economy remain stable during that very difficult period, and ensured the sector was able to continue to underpin the strength of the nation's economy."
Association of mining and exploration companies CEO Warren Pearce said McGowan had achieved a great deal for WA and would be remembered for a great many achievements in public life across a long political career.
"Our members will especially remember his extraordinary leadership during COVID-19, and his personal commitment to keeping the WA mining and mineral exploration industry open and operating safely," Pearce said.
"It also set up WA's mining industry to take advantage of new global opportunities in critical minerals and downstream processing and enabled it to thrive when much of the mining industry around the world was closed down."
Pearce said beyond the pandemic, McGowan's genuine commitment to work with and collaborate with industry had helped to diversify the state's economy and attract significant new investment into WA.
