A Labor preselection in the NSW federal seat of Barton, being vacated by former minister Robert McClelland, is expected to be a three-way contest.

Nominations for the seat, which Labor holds with a margin of 6.9 per cent, will close this Monday.

Former NSW premier Morris Iemma is understood not to be a contender despite earlier speculation.

The preselection is set to be a contest between Rockdale mayor Shane O'Brien, former state and federal ministerial adviser Kirsten Andrews and former Hurstville mayor Steve McMahon.

A preselection ballot is due to be held next month, ahead of the September 14 federal election.

Mr McClelland, a former attorney-general and experienced barrister, has announced his retirement and is believed to be keen to take up a vacancy on the NSW Industrial Relations Commission.

It is not yet known whether he will quit federal parliament before taking up a new role, potentially triggering a by-election, or retire at the election.

Mr O'Brien, the assistant secretary of the NSW Public Service Association, is widely seen as the frontrunner for the candidacy.

Mr McMahon made a name for himself when he sold the mayoral car to build a children's playground.

Kogarah mayor and accountant Nick Varvaris has been endorsed as the Liberal Party candidate in the seat.