Sources say Ms Bishop will retire as a minister, but stay on as a back bencher.
It is understood Ms Bishop has decided it “is in the interests of the nation” that she retire as a minister.
Ms Bishop put her hand up to be Prime Minister after a leadership vote was taken on Friday.
The vote was won by Scott Morrison, who has become the nation’s 30th Prime Minister.
Ms Bishop is believed to have disappointed by the fact that not one of her WA colleagues voted for her on Friday.
More later and on #insiders