Hain will step down as shadow secretary for Wales, but will continue to sit as an MP.
He told BBC Radio Wales: “I want to take forward the vital project, the biggest investment ever in Wales, £30 billion investment, for the Severn barrage, and also the biggest single source of renewable energy in Europe and one of the biggest in the world.
“That’s what I want to do and you can’t really do that as shadow secretary of state.”