Anthony Albanese says he is consulting with Labor caucus members over his shadow ministry line-up.
Former NSW premier Kristina Keneally will be on Anthony Albanese's frontbench following a decision by NSW MP Ed Husic to stand aside from the shadow ministry.
Mr Albanese, the Labor leader-elect in the wake of Bill Shorten's resignation, was insisting Senator Keneally be in the shadow ministry following her prominent role in the election campaign.
However, Senator Keneally's Right factional colleagues were reportedly pushing back on the idea.
Mr Albanese will meet with his caucus in Canberra on Thursday to finalise new arrangements, following the election loss on May 18.
The caucus will determine who gets a shadow ministry gig, but Mr Albanese will pick portfolios.
He plans to convene a meeting of the shadow ministry next week after announcing the portfolios on Sunday or Monday.
Mr Husic said in a statement on Facebook on Wednesday while he had loved being a shadow minister he would not be running for the role.
"Instead I'll be backing my great friend Kristina Keneally for that spot. We need to ensure someone of Kristina's enormous talents has the opportunity to make a powerful contribution on the frontline, in the Senate," Mr Husic said.
Mr Albanese told reporters in Canberra he had made it clear to caucus he wanted Senator Keneally as part of his team.
He said he was talking to colleagues "not with hats on".
"I'm talking to them about the Labor interest - not any factional interest, not any state interest, the Labor interest."
Asked about the future of Mr Shorten, Mr Albanese said he would be respected as a former leader.
"I will treat him with the appropriate respect," he said.
Speaking just minutes after Scott Morrison's ministers were sworn in, Mr Albanese said his Labor team would be "much better than the team on the other side".
"I have no doubt that the team that we assemble will be balanced ... I expect balance in terms of gender, in terms of state representation and I expect that it will be a very good team who will hold the government to account," he said.