"This could be a powerful, unifying new institution for our country - something all of us can be proud of," she said in her valedictory speech on Wednesday.

"So let's get on with it."

Although Ms Macklin won't be there, Labor says it will hold a referendum on having an indigenous voice in parliament, if successful at the next election.

The former indigenous affairs minister reflected on ex-Labor prime minister Kevin Rudd's 2008 apology to the stolen generation, which she says was resisted for so many years, compounding the hurt.

"But in the moment, when Kevin finally spoke for all of us, and I mean all of us, and said that one word: 'sorry' - it seemed so simple, so easy," she said.

"Why did it take so long? But it needed leadership."

The veteran Labor MP has held the Melbourne seat of Jagajaga for more than 22 years, making her the longest serving Labor woman in the House of Representatives.

Ms Macklin was first elected to parliament in 1996 and went on to serve as deputy Labor leader to Kim Beazley.

The 65-year-old has served as minister for families, community services and indigenous affairs for six years and minister for disability reform for two years.

It didn't take long for Ms Macklin to tear up in the chamber on Wednesday as she spoke to her colleagues, joking that they were taking bets on how soon it would take her to cry.

The veteran MP says it was her desire to confront inequality which motivated her career in public policy.

"Inequality in all its forms is the driving force behind the divisions in our society," she said.

"It is dragging us down."

Ms Macklin encouraged the new generation of Labor MPs to have a "big heart" in politics, as she fears an increasing amount of Australians believe the "system is rigged".

"It is bad enough for Australians to lose faith in us - it is worse still if they give up on us," she said.

"We cannot allow this to happen.

"Our people are too important, what we've built is too precious, to let it all crumble."

Before being embraced by her colleagues as she finished her speech, Ms Macklin finished with a quote from Martin Luther King.

"Power without love is reckless and abusive, and love without power is sentimental and anaemic," she said.

"Power at its best is love implementing the demands of justice, and justice at its best is power correcting everything that stands against love."

Australian Associated Press