Deputy mayor Barb Murdoch and councillors James Trenery and Jenny O'Connor have been touted as mayoral contenders.

The mayor and deputy mayor elections will be held on Thursday.

Cr Gaffney confirmed his decision not to stand for the final term before elections are held next year.

"I've decided to stand aside after three terms as mayor and two as deputy mayor," he said.

"Three councillors have indicated they would like to step into the role and they deserve their chance.

"Indigo Shire is in a sound financial position and is a great place to live.

"I hope whoever the next mayor is has the interests of the entire Indigo Shire at heart."

Cr Gaffney was re-elected mayor 12 months ago on a 4-3 vote over Cr Trenery.

Indigo is the final council to conduct its mayoral election after the sudden death of Cr Don Chambers.

His replacement, Cr Emmerick Teissl, attended his first council meeting this week since winning a count-back to replace Cr Chambers last week.

Cr Chambers backed Cr Gaffney in the mayoral vote last year.

"Don Chambers has been a big loss, but Emmerick Teissl is very capable and has hit the ground running," Cr Gaffney said.

Yackandandah-based Cr Trenery was elected to Indigo Shire in 2012 and Cr Murdoch was mayor in 2012 and 2013 after a being a member of the former council.

Cr O'Connor was elected to the council in 2012 and is also the Greens’ candidate for next year's federal election in Indi.