Hong Kong's embattled leader Carrie Lam, who has governed the global financial hub through the unprecedented upheaval of anti-government protests and Covid-19, said on Monday she will not seek a second five-year term of office.

Lam's announcement came as media said Chief Secretary John Lee, Hong Kong's second most senior official, was set to resign to join the race to replace Lam in May as the Chinese-ruled city's next leader.

"There’s only one consideration and that is family. I have told everyone before that family is my first priority," Lam told a regular press briefing.

"They think it’s time for me to go home."

She declined to comment on possible candidates to replace her and said she had not decided on her future plans.

Lam, born in British-ruled Hong Kong in 1957 and a life-long civil servant who describes herself as a devout Catholic, took office in 2017 with a pledge to unite a city that was growing increasingly resentful of Beijing's tightening grip.

Two years later, millions of democracy supporters took to the streets in sometimes violent anti-government protests. The unrest led to Beijing imposing a sweeping national security law in June 2020, giving it more power than ever to shape life in Hong Kong.

An exasperated Lam said at the height of the unrest in 2019 that if she had the choice she would quit, adding in remarks to a group of business people that the chief executive "has to serve two masters by constitution, that is the central people's government and the people of Hong Kong".

"Political room for manoeuvring is very, very, very limited," she added, according to an audio recording of her comments obtained by Reuters.

Lam said on Monday she had proposed a government restructuring to mainland authorities that would include new policy departments but it would be up to the city's next leader to decide whether to go ahead with the plan.

City leaders are selected by a small election committee stacked with Beijing loyalists so whoever becomes the next leader of the former British colony will do so with Beijing's tacit approval.

Lee, 64, a security official during the prolonged and often violent 2019 pro-democracy protests, was promoted in 2021 in a move some analysts said signalled Beijing's renewed focus on security rather than the economy.

Lee did not immediately respond to a request for comment.

Other possible contenders mentioned in media include the city's financial secretary, Paul Chan, as well as former leader Leung Chun-ying. None has yet to announce a bid.

Hong Kong returned from British to Chinese rule in 1997 with the guarantee of wide-ranging freedoms, including an independent judiciary and right to public assembly, for at least 50 years.

The United States sanctioned both Lam and Lee, among other officials, in 2020, saying they had undermined Hong Kong's high degree of autonomy from Beijing and curtailed political freedoms with the national security law that punishes offences like subversion and secession with up to life imprisonment.

Chinese and Hong Kong authorities deny individual rights are being eroded and say the security law was needed to restore the stability necessary for economic success after the prolonged unrest.

The leadership election was pushed back from March to May 8 to give the government time to battle a Covid outbreak that has infected more than a million of the 7.4 million people in the city. Lam's term ends on June 30.

Since Hong Kong returned to Chinese rule it has had four chief executives, who all struggled to balance the democratic and liberal aspirations of many residents with the vision of China's Communist Party leadership.