Richter, a 40-year-old Democrat who lives in Guilford, said last month he was considering a run for the Fairfield County seat in 2008.
State Democratic Chairwoman Nancy DiNardo said Richter told her Wednesday that he has decided not to run.
"It was personal reasons," DiNardo said. "He just feels it's not the right time for him now."
Richter has three young sons and is attending Yale University with an undergraduate major in ethics, politics and economics.
A series of concussions forced Richter into early retirement in 2003 after 15 seasons with the Rangers, the club he backstopped to the Stanley Cup title in 1994 after a 54-year drought. Richter was a three-time All-Star and the MVP of the 1996 World Cup, in which he led the United States to a gold medal.
Richter could not be reached for comment Thursday by telephone or e-mail.
Shays was considered vulnerable last year because of his support for the Iraq war, but managed to defeat Democrat Diane Farrell for a second time. Connecticut's two other Republican congressional representatives lost their seats in a nationwide sweep that saw Democrats take control of the House for the first time in more than a decade.
Richter does live not in the 4th Congressional District, but Connecticut law does not require a congressional candidate to live in the district in which her or she is running.