Jim Chalmers pulled out of the contest to replace Bill Shorten, leaving Mr Albanese a free run at the top job.
The Queensland MP said he carefully considered running on a platform of generational change.
“But in the end I couldn’t be assured of winning,” Mr Chalmers said in a statement on Thursday.
“And if I did win, the extra responsibilities of leadership would make it much harder to do my bit at home while the youngest of our three little kids is only five months old.”
Victorian Labor right-faction MPs Richard Marles and Clare O’Neil are both considering standing for deputy leader.
“Many Labor people – particularly Labor women – have contacted me in recent days encouraging me to run for Labor deputy leader to ensure there is a woman in the leader/deputy team,” Ms O’Neil tweeted.
“One of the best things about Labor is that women are encouraged to put themselves forward for leadership roles and I know that will continue.
“I’m going to talk to a few colleagues about whether it’s possible for me at this point.”
Labor has aimed to have a man and a woman in the leadership duo, from different states and factions.
But with Mr Albanese coming from the left faction, the right outside NSW is paying the price for a lack of high profile women in the lower house.
Mr Chalmers spoke to Mr Albanese on Thursday morning.
“I will enthusiastically support him and work tirelessly with our team to give Australians the Labor government they need and deserve at the next opportunity,” Mr Chalmers said.
Shadow treasurer Chris Bowen pulled out of the race on Wednesday, a day after declaring his candidacy, having realised Mr Albanese had strong grassroots support.
Nominations for Labor leadership will close on Monday, but Mr Chalmers’ withdrawal makes the prospect of a contested ballot highly unlikely.
If there are no further nominations the Labor caucus is expected to meet next week to confirm the leadership team, including deputy leader and senior Senate personnel.
Who is Anthony Albanese?
Anthony Albanese – universally known as Albo – holds a unique position in the Labor hierarchy.