The moderate powerbroker whose support helped hoist Dominic Perrottet to the state's top job in October 2021 had been widely considered a frontrunner in the leadership race after Mr Perrottet stepped down after losing Saturday's election.
"I have a young family and I would love to spend a little more time with them," Mr Kean said late on Sunday.
"The election result will enable me to do that.
"Tommy recently turned three and now is the time for me to hang out and be a dad."
He would continue to serve his "wonderful" electorate of Hornsby, "though not as leader and not as part of the leadership team", he said.
Mr Kean also thanked Mr Perrottet for his service after the premier fell short of winning the coalition a historic fourth term.
It leaves Alister Henskens, who held several portfolios in the Perrottet ministry, as the only early frontrunner to take the Liberal reins.
Mr Henskens didn't rule out running for the leadership on Sunday, saying he'd wait to discuss the party's future direction with a wide range of people.
"There are a whole lot of seats that are still undecided, I'm much more interested in scrutineering ... than talking about leadership," he told Sky News.
Having entered Saturday with a claim on 33 seats, the party on Sunday had a firm hold of 15 seats and faced a nervous wait in another 11 electorates.
Mr Henskens pushed back over talk the party had been too focused on battling North Shore independents to cater to Western Sydney voters, saying many measures were aimed at cost-of-living pressures.
The "perfect storm" of retirements, unfavourable distributions and an "it's time" factor had undermined the government's future-focused campaign, he said.
But with six more seats likely to fall the Liberals' way and the Nationals on track for 11 seats, the election result was "not the 15-seat landslide of 2011", he said.
Labor ending up with 45 to 48 seats, in a parliament requiring 47 votes for a majority, would make for a very narrow parliament and a "hotly contested political environment", Mr Henskens said.
Senator Andrew Bragg said the party suffered heavy losses in Western Sydney and the regions but appeared to retain its heartland in inner Sydney and the North Shore.
"One of the most important lessons here is that we have to be a party that doesn't go to the margins and that doesn't seek to inject division into the mainstream," he told ABC radio on Sunday.
Asked about some right-wing commentators calling for the party to abandon the centre and go further to the right, Senator Bragg laughed.
"The numbers speak for themselves," he said.
"Obviously, we've lost a lot of seats to Labor and last time I looked Labor was a party of the centre-left."
Some of the most significant losses were in seats where the Liberal incumbent was retiring, including Health Minister Brad Hazzard's Wakehurst, former speaker Shelly Hancock's South Coast and Customer Services Minister Victor Dominello's Ryde.
Parramatta - in the heart of Sydney - underwent a 15 per cent swing to Lord Mayor Donna Davis, ending a 12-year Liberal reign.
Former deputy Liberal leader Stuart Ayres appears to have been felled by Labor's Karen McKeown, despite the party throwing significant resources and former prime minister John Howard at the outer western Sydney seat.
Willoughby - the northern Sydney former Liberal stronghold once held by ex-premier Gladys Berejiklian with a 21 per cent margin - and Pittwater hang in the balance after independent challenges, though the Liberal party is confident postal votes can edge Tim James and Rory Amon over the line.
8°C