A Labor source said Ms Plibersek was "honoured to have the support of such a distinguished former prime minister and Labor hero" campaigning for her in a leadership race that will could see as many as five or six candidates.

Ms Plibersek will formally announce her candidacy for the leadership in Sydney on Monday afternoon following her left factional colleague Anthony Albanese's declaration on Sunday.

Ms Gillard's intervention in the Labor Party leadership contest is the first time she has involved herself in internal party politics since she was ousted from the prime ministership in 2013 and left parliament at the election just a few weeks later.

Ms Gillard attended the Labor Party election campaign launch a fortnight ago where she appeared with other former Labor prime ministers Kevin Rudd and Paul Keating. Since leaving politics she has concentrated on her work as chairwoman of the Global Partnership for Education and as chair of the board of mental health organisation Beyond Blue.

It is understood Ms Plibersek made up her mind to run on Sunday after receiving support from colleagues, senior party figures and rank-andd-file party members. Outgoing leader Bill Shorten is also understood to support her candidacy as does former families minister Jenny Macklin and employment spokesperson, Brendan O'Connor.

Other leadership contenders could include treasury spokesman Chris Bowen and defence spokesman Richard Marles with finance spokesman Jim Chalmers also believed to be considering his options.

Ms Plibersek and Mr Albanese are both from Sydney and the left faction, complicating the leadership race.

Some MPs have suggested Ms Plibersek's leadership chances are hampered by her close association with Labor's comprehensive election loss as she was Bill Shorten's deputy for six years.

But other MPs point to Ms Plibersek's experience and popularity and say it is important to give a women a chance at leadership of the Labor Party, particularly in light of Ms Gillard's experience.

The party's national executive will meet on Monday to set out the process for the leadership vote. Mr Shorten will remain as leader until a new leader has been chosen.

Under leadership rules introduced by former prime minister Kevin Rudd in 2013, leadership contenders must win support of both party members and the Labor party room.

When Mr Shorten ran against Mr Albanese in 2013 the process took about five weeks to resolve. Mr Albanese won the rank-and-file membership vote but Mr Shorten won the caucus vote and, when the two were combined, he was the victor.