Senator Sinodinos, a former chief of staff to John Howard, is retiring as NSW senator later this year to take on the role of Australia's ambassador to the United States.

Mr Molan, a former major-general in the Australian Army, has the endorsement of Prime Minister Scott Morrison to return to the Senate, having failed to retain his seat at the May election after being placed fourth on the coalition ticket.

Mr Morrison has written a letter of reference for Mr Molan.

Two factors working in Mr Molan's favour are being based in a regional community - Queanbeyan in southeast NSW - and his pledge to stay on in parliament only until the next election when Senator Sinodinos' term was due to expire.

Mr Morrison is campaigning to boost regional representation in parliament, having successfully backed another former MP Sarah Henderson to fill a Senate vacancy in Victoria.

While a preselection date has not been set, it is understood the NSW Liberals will wait until after federal parliament rises on December 5 to conduct the ballot.

Catholic Schools NSW boss Dallas McInerney was flagged as a potential candidate but has withdrawn.

Former Liberal MP for Eden-Monaro Peter Hendy has been mentioned in media reports as flagging an interest in the role.

There's expected to be strong interest in Senate candidacy.

Australian Associated Press