Sen. Christopher Dodd will remain chairman of the Senate Banking Committee and not take over the health committee after the death of his friend, Sen. Edward Kennedy, a Senate aide said Wednesday.

Dodd, a Connecticut Democrat, will hold a news conference Wednesday to announce his decision, said two banking industry lobbyists who asked not to be identified.

A spokeswoman for Dodd could not be reached for comment, but had said on Tuesday the senator would make a decision shortly.

Dodd’s choice has implications for two urgent issues before Congress and the Obama administration — financial regulatory reform and healthcare reform — and for other committee posts.

His decision not to replace Kennedy as health committee chairman clears the way for Democratic Senator Tom Harkin, who presently chairs the Senate Agriculture Committee. If Harkin left that panel, a number of senators could succeed him.

Harkin and Dodd have both been deeply involved in recent weeks in the high-profile healthcare reform debate, assuming the burdens of the health panel chairmanship as Kennedy struggled against cancer. He died last month.

Dodd underwent successful surgery for early-stage prostate cancer in August and is recovering well. He faces a difficult reelection campaign in 2010 in Connecticut.