"Something has happened in our country that no one could anticipate," she said, noting "massive debt," health care legislation she opposed and the general direction of the nation. "It has caused me to look at the resignation in a different way."
The 66-year-old had previously cited her young children as motivation for returning to Texas full time, but she said Wednesday that her concern for the nation led her to believe her children were better served by her staying in the U.S. Senate and fighting for what she believes in.
She ended the 10-minute news conference, hastily called in San Antonio because McConnell was in town, without taking questions.
The decision comes after Republican Senate colleagues urged her to stay and 20 Texas Republican House members signed a letter lauding her years of service, which they said were needed in this period of "sweeping change."
"If you sense an audible sigh of relief in the air, it's every single Republican in the U.S. Senate," said McConnell, calling her an invaluable member. "These are unusual and unique times, and we need Kay Hutchison in the Senate."
Cornyn agreed, saying Hutchison could do greater good by staying and fighting.
"The easiest thing for her to do would have been to quit. The hardest thing for her to do was put her family and other considerations in the background and say 'I stayed when my country needed me,"' he said.
Hutchison said last year that she would step down by the end of 2009 to concentrate on her run for governor.
Then, in late fall, she said she felt she needed to remain in the Senate to battle President Barack Obama's health care initiative. She said she would stay until after the March 2 primary. And on the campaign trail in Texas in late February, Hutchison continued to say she would resign after the health care debate and that she would be gone by November 2010.
Her announcement Wednesday was not her first reneging on a decision to leave the Senate. When elected in 1994, she said she would limit herself to no more than two terms, but she sought a third term in 2006, saying she wanted to stay in the Senate to work on homeland security and tax issues. She also publicly toyed with running for governor twice before entering the 2010 primary.
Perry, who shaped his primary re-election fight against Hutchison railing against her as a Washington insider, now faces Democrat Bill White in the November general election.
Perry said Wednesday that he's glad she's there to fight health care and cap-and-trade energy legislation.
"I am pleased that Sen. Hutchison has decided to complete her term in the Senate and remain in the fight against Washington's imprudent, harmful policies," he said in a statement.
Hutchison was elected to the Senate in 1993 after serving as state treasurer and as a Texas legislator. She's the only woman elected to represent Texas in the U.S. Senate.
Several Texas politicians from both parties have been waiting to run for Hutchison's seat. A Republican candidate would be favored to win that seat if she left, but Democrats saw it as a possibility to win back a Senate seat they haven't had for 17 years.
Roger Williams, a Republican running for the seat, said Hutchison's announcement wouldn't change his plans.
"Our campaign has more money, more volunteers and more momentum than anyone else. I have said from the beginning that I would be ready to run a campaign whether it was this year or in 2012," Williams said.
Democrat John Sharp also plans to stay in the race for 2012, said his spokesman Kevin Cecil.
"I certainly enjoyed visiting with Texans for the last year and a half and learning about their concerns as we waited for Kay Bailey Hutchison to resign," Sharp said in a statement."
In the governor's race, Hutchison initially was seen as a real threat to Perry because of her long tenure in office and her popularity in Texas.
Perry's campaign attacked her from the start as "Kay Bailout" and a Washington insider -- a strategy she acknowledged late in the campaign had damaged her chances of winning the governorship.
"I didn't think that anyone could turn my success in producing results for Texas into a negative, but I think that he has attempted to do that and that is what I've been having to fight against," she said shortly before the primary.
She continually accused Perry of being arrogant and staying in office too long. He took over as governor in December 2000 when George W. Bush resigned to become president.