Sir Peter, 84, who was ex-Prime Minister Sir Anthony Eden's personal assistant in the 1955 election, was first elected to the Commons 55 years ago aged 29. He has contested 15 parliamentary elections in five constituencies.
The Lincolnshire MP has the honorary title, Father of the House of Commons because of his longevity
But his career was stymied, as he was a fierce critic of Margaret Thatcher's economic policy and he seconded Michael Heseltine's nomination for to challenge her for the leadership of the Conservative Party in 1990.
The former stockbroker and merchant banker first contested a seat in 1957, but won West Nottingham from Labour in 1959, only to lose it in 1964.
He was a front-bench Opposition spokesman on Treasury and Economic Affairs and on Foreign Affairs in the 1970s.
Sir Peter's decision to stand down at MP for Horncastle in Lincolnshire will open up a plum vacancy in a safe Tory seat. as he had a 13,871 majority.
Mr Johnson has always insisted that he will see out his term in the capital, due to end in 2016, but the Prime Minister suggested that he "can stay on as mayor and come back to the House".
He shares the longest unbroken service with MPs Sir Gerald Kaufman, Kenneth Clarke, Michael Meacher and Dennis Skinner.
Commons Speaker John Bercow said: "Peter has been a magnificent credit to his constituency, to his party and to his country.
"He is a fine orator with a great wit, whom I have come to know and greatly admire over the last 17 years."
David Cameron said: "Sir Peter will be greatly missed as father of the House by his colleagues in his own party and across Parliament."