Updated: 11:55 a.m.

Sen. Jim Webb (D-Va.) announced he will not seek re-election in 2012.

The first-term Senator issued a statement saying he will return to the private sector, removing the possibility of a high-profile rematch with former Republican Sen. George Allen.

“It has been a great and continuing privilege to serve in the United States Senate,” Webb said. “I am very proud of my talented and dedicated staff, which has worked tirelessly to resolve the issues on which I based my candidacy, and to protect the interests of all Virginians in this national forum.”

In 2006, Webb unseated Allen in one of the biggest upsets of the cycle. Allen announced two weeks ago that he is running again for the seat and was critical of Webb’s voting record in the early days of his campaign.

Allen will face at least one other candidate in a GOP primary but is considered the favorite against potential challengers that include Richmond Tea Party President Jamie Radtke, state Del. Bob Marshall and Corey Stewart, chairman of the Prince William Board of County Supervisors.

There is no clear favorite to run in Webb’s stead, but Democratic names mentioned previously include Democratic National Committee Chairman Tim Kaine, who is the former governor of Virginia, and former Rep. Tom Perriello, who was defeated for re-election in November.

Having previously won statewide and with name recognition as high as it gets in Virginia, Kaine would be seen as the party’s best possible recruit. However, he said last month that he was committed to helping re-elect President Barack Obama to the White House.

“As Republicans face a brutal primary between a flawed Washington establishment candidate and a right-wing extremist who is raising money at a good clip, Democrats will field a strong candidate,” said Democratic Senatorial Campaign Committee Chairwoman Patty Murray (Wash.). “The 2012 Virginia Senate race will be competitive but Democrats will prevail there just like we did in 2006 and 2008.”

Roll Call Politics rates this race a Tossup.