Victoria's Nicola Roxon resigned this morning from cabinet as Attorney-General and will not contest her seat in September 14 election but said she will serve out the remainder of her term on the backbench.

The government's leader in the Senate, the Higher Education Minister, Chris Evans, also resigned his post from cabinet and will step down from the Senate in the coming months when a suitable replacement can be found.

The Governor-General Quentin Bryce will on Monday swear in Australia's third Attorney-General and third Immigration Minister since Labor took power in 2007 at Government House, with Brendan O'Connor replacing Chris Bowen as Minister for Immigration while Victorian MP Mark Dreyfus will be elevated from a parliamentary secretary role to that of Attorney-General.

The position is a natural fit for Mr Dreyfus, who is a former Melbourne barrister and Queens Counsel and regarded as one of Australia's sharpest legal minds.

Mr Bowen replaces Senator Evans as Minister for Tertiary Education, Skills, Science and Research and will also assume responsibility for the Small Business portfolio. Mr Dreyfus will relinquish his post as Cabinet Secretary which goes to Jason Clare, who will also keep the Home Affairs and Justice portfolio.

Ms Gillard's elevation of Mr Clare will be seen as a large vote of confidence in the young Labor minister, who has been making a meteoric rise through the Labor ranks since his election to Paul Keating's former seat of Blaxland in 2007. South Australian Labor MP Mark Butler will become Minister for Housing and Homelessness and former Army Colonel Mike Kelly enters the Ministry as Minister for Defence Materiel.

Ms Gillard also appointed a number of new faces to the junior outer ministry.