The opposition frontbencher is tipped to replace retiring MP Chris Hayes in the safe western Sydney seat of Fowler.

ALP leader Anthony Albanese said pre-selection was a matter for Labor's NSW branch.

"But can I say this about Kristina Keneally - she's a fantastic and valued member of my team," he told reporters in Sydney.

"She makes an enormous contribution as both a senator and as a frontbencher. I look forward to Kristina continuing to make a contribution well into the future."

While Senator Keneally is Labor's deputy leader in the upper house, her future was uncertain with Deborah O'Neill receiving strong support to top the party's ticket at the next election.

Senator O'Neill - who is also from the right faction - will now lead the Senate ticket ahead of the left's Jenny McAllister.

Senator Keneally, who is also from Labor right, would have been relegated to third spot, which is seen as close to unwinnable.

Labor has not won three seats in NSW at a regular half-Senate election since Kevin Rudd swept to power in 2007.

Mr Hayes had backed local lawyer Tu Le to replace him in representing the multicultural electorate which Labor holds with a 14 per cent margin.

Senator Keneally now lives on Sydney's northern beaches but held the state seat of Heffron in Sydney's inner-city suburbs during nine years in state parliament.

Labor frontbencher Tony Burke, a leading figure in the NSW right, said any decision that did not engage the local community would be made at the party's peril.

Mr Albanese brushed off suggestions having Senator Keneally in the lower house would give the party another leadership contender.

"The fact is that Kristina is a friend of mine. She is a strong supporter of mine and I've always had a very good relationship with Kristina," he said.

"She's a valued member of the team."

Australian Associated Press