TORONTO - Former Winnipeg mayor Glen Murray is dropping his bid to become Toronto's next mayor and will seek to replace former Ontario cabinet minister George Smitherman in his downtown Toronto riding, sources confirmed Thursday.

Smitherman is expected to vacate the seat in the new year to pave the way for his bid to become the city's next mayor.

Murray will announce his intention to seek the Liberal nomination in the riding of Toronto Centre this afternoon, a senior Liberal party source confirmed.

Murray became the first openly gay mayor in a major Canadian city when he won the Winnipeg race in 1998. He has lived in Toronto for about six years and is currently chief executive of the Canadian Urban Institute.

His decision removes him as a potential rival for Smitherman, who served as health minister and energy and infrastructure minister, in the mayoral race. Former Progressive Conservative leader John Tory is also expected to toss his hat into the race.

Smitherman, one of Ontario's first openly gay politicians, resigned from cabinet last month but has yet to give up his seat, a riding represented federally by Liberal Bob Rae, who once served as Ontario's NDP premier.

"Toronto Centre is one of the most diverse parts of Ontario," Smitherman said in a statement.

"I am supporting Glen Murray because his work, whether as a big city mayor or a public policy leader, has always been focussed at the local community level."

There were a few factors that were likely behind Murray's change of heart, insiders say.

"He's only lived in the city for six or seven years, and to run for mayor in a city of 2.5 million, having only lived here for a period of time, is a bit of a stretch," said one Liberal source.

"And running for mayor also requires you to raise probably between $1 million and $1.5 million, and that's a lot of work."

Murray, who's already been tabbed as cabinet material, is better known locally and his experience as a downtown mayor will be a big asset in the upcoming byelection, they said.

He's worked on AIDS-related issues and helped new immigrants in the city, which will translate well in a riding that's the home of thriving gay and immigrant communities, the source said.

"It's probably a much better fit," they added.

Murray, who was born in Montreal, has much to offer and doesn't like being pigeonholed as the gay politician, said another source.

"The one thing that Glen is always very clear about is that he doesn't want to be the gay candidate," the source said.

"He is a candidate who just happens to be gay."