Washington (CNN) - Sen. Chris Dodd, D-Connecticut, plans to announce his retirement, two sources close to the lawmaker told CNN.
A news conference is planned for Wednesday to announce the decision, one of the sources said.
Dodd, 65, had been winning congressional elections in his state since 1974, but has recently been considered one of the most vulnerable Democrats seeking re-election in 2010. He has been criticized for ties to the financial industry, and several formidable challengers have been vying to challenge him in the November election.
The senator was criticized last year for his role in handing out big bonuses at AIG, after the insurance giant received taxpayer bailout money. Dodd initially denied having anything to do with the American International Group paying out millions in bonuses, then later acknowledged his role.
Dodd, who is chairman of the Senate Banking Committee, acknowledged to CNN that he was responsible for language added to the stimulus bill to ensure that existing contracts for bonuses at bailout recipients, such as AIG, were honored.
Soon after that, Dodd acknowledged that his poll numbers had slipped.
Rumors about Dodd's retirement have swirled around Washington, D.C., for months.
Dodd's news conference comes a day after another Democratic senator, Byron Dorgan of North Dakota, announced that he will not seek re-election in November.
Dodd's exit also paves the way for other Connecticut Democrats to enter the race.
Connecticut Attorney General Richard Blumenthal is one possible candidate to run for Dodd's seat. Blumenthal is one of Connecticut's most popular Democrats, and his candidacy could increase the likelihood that Democrats will retain the Senate seat in November's midterm election.
– CNN's John King and Dana Bash contributed to this report.
(updated 7 am with additional information)
So long to one of the most corrupt politicians in history. So now he gets a fat retirement from tax payers and lifetime medical when in fact he should be in prison. Vote them out!
Best of luck on your future endevours Sen. Dodd.