Updated 2.15pm

German Chancellor Angela Merkel has told leaders of her Christian Democrats (CDU) that she will not seek re-election as party chairwoman at a conference in early December, a senior party source said on Monday.

However, she declined to back any of the candidates seeking to replace her as party leader of the centre-right CDU at a convention in December.

"It's true that Annegret Kramp-Karrenbauer and Jens Spahn both announced their candidacy today," Merkel told reporters after a closed-door meeting. She added she did not want to influence the election of her successor as CDU party leader.

Asked whether her announcement not to run for a fifth term as chancellor also applied for a snap election before 2021, Merkel said that she just made this clear and that she did not want to participate in any further speculation.

Merkel, 64, has been CDU chairwoman since 2000 and giving up the role would start a race within the party to succeed her as chancellor. The euro fell to session lows on the news.

German news agency DPA, citing sources, tweeted that Merkel wanted to remain chancellor.

However, she has ruled out running for a senior position in the European Union after a European parliament election next year, members of her Christian Democrats (CDU) conservative party told Reuters.

Monday's developments come after the CDU came home first but bled support in a vote in the western state of Hesse on Sunday, the second electoral setback in as many weeks for Merkel's conservative alliance.

Standing down from the party chair would allow a new CDU chairman or woman to build a profile before the next national election, due in 2021. Merkel's favoured successor is CDU party secretary general Annegret Kramp-Karrenbauer.

Merkel's weakness at home may limit her capacity to lead in the European Union at a time when the bloc is dealing with Brexit, a budget crisis in Italy and the prospect of populist parties making gains at European parliament elections next May.

Flashback to 2000 when she was first elected.