Labor has formally disendorsed its candidate for John Howard's former seat of Bennelong in light of his involvement in a corruption investigation.
It will hold a new preselection for the seat on Tuesday next week.
Ryde councillor Jeffrey Salvestro-Martin had won the ALP preselection for Bennelong.
But on Friday the NSW Independent Commission Against Corruption announced it would investigate whether Mr Salvestro-Martin and others received undisclosed political donations in the form of advertising in the lead up to the September 2012 local government elections.
The ICAC intends to call Mr Salvestro-Martin as a witness to its public hearings on the matter.
The ALP national executive said on Monday it had not made judgment about the ongoing investigation.
"However, the national executive considers that, in light of these public statements by the NSW ICAC, the continued endorsement of Mr Salvestro-Martin as a candidate for the federal electorate of Bennelong is no longer viable," national ALP secretary George Wright said in a statement.
It has reopened nominations for Bennelong and will hold a preselection ballot on July 23.
Former tennis champion John Alexander holds the seat for the Liberal party with a 3.1 per cent margin.
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