Updated: 7:45 a.m.

Sen. Chris Dodd (D-Conn.), who has for months been considered the most vulnerable incumbent seeking re-election this year, will announce Wednesday that he will not run for another term in November, according to a Democratic source familiar with the decision. Dodd will make the announcement at a press conference at his home in Connecticut.

Dodd’s move, unlike the announcement just hours earlier that Sen. Byron Dorgan (D-N.D.) will not seek re-election, is good news for Senate Democrats because it gives them a better shot at holding the seat in heavily Democratic Connecticut. Polls have shown Dodd trailing in hypothetical races with Republicans who are vying for the nomination to run against him.

Longtime state Attorney General Richard Blumenthal is widely viewed as the Senate candidate apparent for Democrats, and if he runs he will begin the open-seat race as the favorite. The leading Republicans running are former Rep. Rob Simmons and wealthy ex-World Wrestling Entertainment CEO Linda McMahon, who has said she is willing to spend $50 million of her own money on the race.

Long a popular figure in Connecticut since his first Senate election in 1980, Dodd has seen his fortunes plummet quickly over the past couple of years.

His ill-fated decision to run for the 2008 Democratic presidential nomination — and to move his wife and children temporarily to Iowa while he competed unsuccessfully in that state’s first in the nation nominating caucuses — alienated some Connecticut voters. But his problems worsened considerably as the nation’s financial crisis focused attention on Dodd’s role as chairman of the Senate Banking, Housing and Urban Affairs Committee, as well as on real estate loans he received that critics portrayed as sweetheart deals.

There was some speculation that he might pull out of the race in August, when he was diagnosed with prostate cancer and underwent surgery. But he stated at the time that he was in the race to stay, in part to carry on the fight for legislation to overhaul the health care system that had been championed by Massachusetts Sen. Edward Kennedy (D), his longtime colleague and friend. Kennedy died of brain cancer on Aug. 25, and Dodd spoke at his memorial service.