Her announcement on Friday followed Member for Eden-Monaro Mike Kelly stating he would stand down due to health reasons, triggering a by-election in his seat.

READ MORE: Bega mayor Kristy McBain endorsed as Labor's preferred candidate for Eden-Monaro

While Ms McBain will remain a councillor, the shire's Deputy Mayor Sharon Tapscott will become acting mayor until a mayoral election is held.

She only learnt of Ms McBain's intentions earlier this week, saying there had been "no discussion within council over it" and it had been "a bit of a surprise to us all".

Cr Tapscott said Dr Kelly had been an outstanding support for the shire, but believed Ms McBain's nomination was an excellent opportunity for the region.

"I do feel like we are in the last frontier down here," she said.

"I think this will be marvellous for us."

Cr Tapscott did not believe a Bega Valley Shire mayor had ever moved directly towards a federal position before which meant no precedents had been set, so she was having discussions about what the process for a mayoral election in the situation would be.

But she believed it would involve a extraordinary meeting for council with a vote for mayor that would occur "in a timely fashion".

READ ALSO: 'I'm not captured by ideology': Mike Kelly's resignation sparks by-election speculation on all sides

"Given we are in unprecedented times we need to get this sorted so we can continue with the [bushfire] recovery," Cr Tapscott said.

Whoever is elected to mayor will only remain in the role until September, as that is when it had been previously agreed to re-elected the position.

Another councillor, who is also president of the Bega branch of the Labor Party, who supported Ms McBain's move was Liz Seckold who believed she "would be the ideal candidate".

She said during council meetings Ms McBain never grandstands, her "integrity and honesty are fantastic", and she believed Bega's Labor members would be very supportive of her nomination.

Cr Jo Dodds hoped Ms McBain could bring the plight of vulnerable communities back into the national focus and get the urgent help the shire needed.

"The Bega Valley Shire has indeed been neglected by state and federal governments promising much but delivering, as yet, so very little," she said.

"People are in desperate need for suitable shelter as winter bears down on us and the coronavirus pandemic swirls around us."

Greens Cr Cathy Griff said the former mayor's "resolve and leadership" during the Black Summer bushfire crisis had cemented her reputation in the shire.

"What I hope most of all is Kristy further expands Mike Kelly's stand on climate change, given she was the mayor that voted for my climate emergency motion," she said.

"Having a young female in the position would be a refreshing change."

READ ALSO: John Barilaro wants a clear run if he stands for Eden-Monaro, with no Liberal rival

While Crs Seckold and Griff said they would not stand for mayor, Cr Tapscott intends to formally nominate for the role.

"It wasn't something I had considered because I was not going to do another term, but so much changed in the last weeks," she said.

"Kristy has set a lot of things in motion and I want to see those things through."