The 73-year-old Harkin told The Associated Press in an interview, "It's just time to step aside," noting that by the time he would finish a sixth term, he would be 81.
Harkin said the move also would allow a new generation of Democrats to seek higher office.
The announcement comes as a surprise, considering he had $2.7 million in his campaign war chest and was planning a gala fundraiser in Washington, D.C., next month.
Harkin is a leading liberal in the Senate, chairing the health, education, labor and pensions committee and having served as a key salesman of President Barack Obama's 2010 health care bill to the wary left.
No Iowa Republicans have taken formal steps toward seeking the seat.
Harkin's decision eases the burden on the GOP, who have to gain six seats to win the majority in the Senate. The president's party historically loses seats in the midterm elections after his re-election. Obama, a Democrat, was re-elected last year.