Emma Husar says she's "deeply disappointed" that NSW Labor has officially dumped her, a day after the MP declared in parliament she was neither a thief nor a bully.
The state administrative committee met on Friday and "resolved to withdraw its endorsement" of the sitting member as the ALP candidate for the federal seat of Lindsay in next year's election, the party said in a statement.
The NSW branch has referred the preselection of Labor's new candidate to the national executive - meaning there won't be a normal rank and file ballot.
"Deeply disappointed that my endorsement for Lindsay has been withdrawn," Ms Husar tweeted.
"I have not been advised as to the reasons ... I'll await this advice in the interests of procedural fairness and in the meantime I'll consider my options."
The western Sydney MP earlier told News Corp Australia: "I will be challenging the validity of this decision."
Federal Labor leader Bill Shorten believes Ms Husar shouldn't contest the election in 2019.
Ms Husar announced in August she would not run after allegations were levelled against her of bullying and sexual harassment.
But she revealed last week she'd since changed her mind and was eager to recontest the seat.
A Labor investigation found Ms Husar had mistreated her electorate staff but did not find evidence to support claims of sexual harassment or of her flashing another federal MP.
Mr Shorten says his view hasn't changed since the Lindsay MP announced she was quitting.
"I said at the time ... I thought that was the right decision then, both for her and the party," he told reporters in Canberra on Friday. "I haven't changed my mind."
Ms Husar is also gearing up for a defamation lawsuit against the media outlet that revealed the allegations made against her in a confidential Labor internal investigation, which included evidence from more than 20 people.
Ms Husar told parliament on Thursday she'd launched legal action against BuzzFeed and journalist Alice Workman over their story in early August.
"They went ahead and published their slut-shaming story knowing with full intent that it would go viral," Ms Husar told parliament.
"I am not a bully. I am not Sharon Stone. I am not a thief. And I did not deliberately misuse my work expenses."
BuzzFeed says it's aware of Ms Husar's action.
"We're considering our position with our lawyers and will respond in due course," BuzzFeed told AAP in a statement.