Parliamentarians are expressing their thanks to 'father of Reconciliation' Pat Dodson after the federal Senator for WA and lifelong advocate for Indigenous rights announced his retirement from the upper house amid health battles with cancer.

Senator Dodson has informed his parliamentary colleagues of his intention to step away on January 26.

After serving as a commissioner on the Royal Commission into Indigenous Deaths in Custody in the 1980's, and decades advancing the lives of First Peoples, Dodson was appointed to the Senate in 2016 on nomination from then-Labor leader Bill Shorten.

Minister for Indigenous Australians Linda Burney said "his courage and wisdom has been a powerful source of support" through her career, and thanked Dodson for being a "staunch advocate for justice".

"It was an immense privilege to work with him as the Special Envoy for Reconciliation and Implementation of the Uluru Statement," Minister Burney said in a statement.

"That he returned to work after serious health challenges, to be part of the Yes campaign, is a great testament to his strength and dedication.

"Patrick has a long history of advocating for justice for First Nations peoples...He has carried the stories of those who died in custody with him into Federal Parliament, where he has been a staunch advocate for justice - seeking to turn around the rates of Indigenous incarceration and deaths in custody that remain a national shame."

Senator Dodson began an extended leave of absence as he battled with cancer earlier this year.

Minister Burney said "he leaves a remarkable legacy which we all have a responsibility to continue".

The Prime Minister extended his own thanks for the work of his colleague and friendship formed.

"I have benefited time and time again from his wise counsel, and he has taught me so much over the years," Mr Albanese said of Dodson.

"Patrick is such a generous man. Through 7 years he has gifted every member of our Caucus his wisdom, his courage, his fearless conviction and his eternal good humour.

"Through the powerful example of his own life, he has given so many of us the gift of a greater sense of perspective.

"There are few more reassuring sights in Parliament House than seeing Patrick and his hat coming down a corridor towards you."

Queensland cabinet member and Labor MP Mark Bailey said Senator Dodson "has been a tower of strength and compassion for reconciliation in our nation for many decades", and wished him a full recovery.

Former shadow Minister for Indigenous Australians Julian Leeser, who resigned to the coalition's backbench in response to their official stance against a Voice to Parliament earlier this year, said Senator Dodson had become "a dear friend".

"Pat is called 'the Father of Reconciliation' because that is how he lives," Mr Leeser said in a statement.

The pair worked together as co-chairs of the Joint Parliamentary Committee on Constitutional Recognition.

"During that process, we argued, cajoled, listened and worked to find common ground. I am proud of the work we did together," Mr Leeser said.

"Pat created in my own life, a richer and deeper appreciation of Australia's First Peoples - their frustrations, struggles and pains, as well as their hopes for the future.

"Though I will miss Pat's presence in the building, I am glad his health is improving.

"My hope is that Pat will have a long and healthy retirement where he can savour his contribution to our national life and the enduring cause of reconciliation."