Another veteran Liberal MP, Martin Dixon, who served as education minister in the Napthine government, announced his retirement on Wednesday.
Both are members of electorates considered very safe Liberal seats.
Ms Asher’s seat, Brighton, is held by a margin of 14.3 per cent, while Mr Dixon’s seat, Nepean, is held by a 13.7 per cent margin.
The next Victorian election will not be until November 2018, but the Liberal Party is hoping to finalise preselections by the end of this year.
Ms Asher was the first woman elected as deputy leader of the Liberal Party and has served as minister for small business, tourism, innovation and other portfolios.
In a statement, she said it was time for generational change in the party.
“By me stepping down, I will create an opportunity for a younger and new member for Brighton to enter the Parliament,” Ms Asher said.
“It has been an absolute honour and privilege to have been elected by my colleagues as deputy leader of the Liberal Party for 11-and-a-half years.
“I am also delighted to have served on the frontbench for 18 years.”
Opposition Leader Matthew Guy said Ms Asher had been one of the most significant figures in the Victorian Parliament for two decades.
“I regard Louise as a friend and confidant,” Mr Guy said.
“She has been a great source of advice to me personally, both when I was a political staffer and as an MP.”