The 63-year-old former businessman was first elected as Polwarth’s representative at the 1999 state election, retaining the electorate for the Liberal Party.

Mr Mulder served as transport minister in the Baillieu-Napthine government and for a time was considered as a potential opposition leader.

In a statement, the outgoing Polwarth MP opened up about his formative years in Colac and listed his achievements as a minister.

“It has been an honour to start my life in humble circumstances, then be elected to the Victorian Parliament by a community who knew me well – warts and all,” Mr Mulder said.

“I have been humbled by such an experience, and to represent such great people.”

State Opposition Leader Matthew Guy lauded Mr Mulder as a dedicated local member and outstanding transport minister.

“Terry is a proud Colac boy,” Mr Guy said. “He began working in 1959 as a local paper boy, worked for the Postmaster General’s Office and then founded and ran his own very successful property management company for over 20 years. 

“He has been an inspiration for many in the Liberal Party, including myself.”

Polwarth is held by the Liberal Party on a two-party preferred margin of 10.6 per cent. Mr Mulder picked up a primary vote of 55 per cent at the 2014 state election and Labor candidate Libby Coker gained 28 per cent.

Mrs Coker has been confirmed as the Labor candidate for Corangamite at the 2016 federal election against Liberal MP Sarah Henderson. Labor Party state headquarters has not yet confirmed whether it will field a candidate.

Former Surf Coast councillor Simon Northeast ran as the Polwarth Greens candidate at the 2014 state election while Colac retiree Phil Edge ran for Country Alliance, now known as the Australian Country Party.

Mr Mulder’s retirement has enabled the National Party to field a candidate with the Coalition agreement over not contesting an incumbent MP’s seat now not a consideration. Former Geelong football star Paul Couch ran against Mr Mulder for the National Party at the 1999 state election. However, he  secured less than 17 per cent of the vote.

Nominations for Liberal Party preselection will open up this week.

“I’m confident the community will recognise the commitment the Liberal Party has shown to the people of the Polwarth electorate over my time of service,” Mr Mulder said.  “I believe that the best outcomes for Polwarth in the future will be with a Liberal MP continuing to represent them.”

The Polwarth and South West Coast byelections will be held on the same day, either in late October or early November.