MIKE RANN will step down as South Australian premier on October 20.

He's making way for his Education Minister JAY WEATHERILL to take over as state Labor leader.

Mr Rann said Mr Weatherill was "absolutely capable" of taking over now but it was "absolutely vital" that he did the right thing by the state and complete negotiations for the proposed expansion of Olympic Dam.

"In the next few months (Minister assisting the minister on Olympic Dam) Kevin Foley and I will be immersed in the final round of negotiations that I believe will deliver SA the world's biggest mine, the mine that will have a life of 100 years."

Mr Rann was first elected to parliament in 1985.

He became Labor leader after the 1993 state election and became premier in a minority government in 2002.

Mr Weatherill said it was a privilege to be endorsed as the next leader of the labor party and next premier.

"I have always said the best way to handle a transition is by agreement and we have reached agreement," the premier-in-waiting said.

"The whole of the Labor Party is behind my leadership, I wouldn't have wanted the leadership except on that basis.

"It is important that we pay properly respect to the extraordinary service and incredible achievements of Mike Rann over the last nine and a half years.

"It is good for the state to have a united government ... It is quite an achievement."