Wallace, 53, has been a leading figure in Western allies' support for Ukraine against Russia and was the UK's pick to succeed Jens Stoltenberg as NATO secretary general.
But he failed to get crucial US backing to succeed him, and Stoltenberg has now extended his term at the head of the alliance.
"I'm not standing (as a member of parliament) next time," he was quoted as telling the Sunday Times.
The newspaper said Wallace told Prime Minister Rishi Sunak last month of his plans not to seek re-election at the general election, which has to be held by the end of next year.
He said he will not quit "prematurely" as an MP and force a by-election but will resign as defence secretary before the next cabinet reshuffle, which is expected before September, the weekly added.
The decision was not because he thought the Tories, currently trailing the main opposition Labour party in the polls, would lose but because his constituency in northwest England was being scrapped under boundary changes, he said.
Wallace, a straight-talking former British army officer, has been in the UK parliament for 18 years, and is the longest-serving Conservative defence secretary since Winston Churchill.
He was the only minister in a senior post to remain in the turbulent transition from his political ally Boris Johnson to the short-lived Liz Truss and then Sunak.
He was security minister under Theresa May before becoming defence secretary in 2019.
Wallace has enjoyed strong support among the Tories' grassroots membership and was regularly tipped to be party leader but never actively ran for the top job.
"It wasn't for me," he told the newspaper.
- 'Difficult position' -
Wallace said he counted among his achievements boosting the defence budget by 24 billion pounds ($31 billion) and said higher defence spending would be crucial in the years ahead.
He predicted the world will be "much more unsafe, more insecure" by the end of the decade.
"I think we will find ourselves in a conflict. Whether it is a cold or a warm conflict, I think we'll be in a difficult position," he added.
The UK could be dragged into conflict in Africa against Islamist groups, he suggested, and voiced concern about the effect of Chinese expansionism in the South China Sea on regional politics, and nuclear proliferation.
On Ukraine, he said Russian President Vladimir Putin could "lash out" if he loses and would look for fresh targets, such as against undersea cables carrying Western communications and energy supplies.
Related Links
Space War News
| Subscribe Free To Our Daily Newsletters |
| Subscribe Free To Our Daily Newsletters |
