(Updates with independent confirmation)

WASHINGTON, Sept 8 (Reuters) - U.S. Sen. Chuck Hagel of Nebraska, a harsh critic of the Iraq war, plans to retire and will not seek the Republican presidential nomination next year, a source said on Saturday.

Hagel, 60, who had been considering a White House run, planned to announce on Monday he will not seek a third Senate term in 2008, the source said, confirming reports in two Nebraska newspapers, the Omaha World-Herald and the Lincoln Journal Star.

Hagel's retirement would leave another Republican U.S. Senate seat without an incumbent in the November 2008 general election as the party seeks to overcome the Democrats' 51-49 majority.

Last week, Republican U.S. Sen. John Warner of Virginia said he would not run for re-election.

Hagel will announce "he will not seek re-election and doesn't intend to be a candidate for any office in 2008," a source close to Hagel in Washington said.

Hagel, who earned two Purple Hearts as a combat soldier during the Vietnam War, has been a harsh critic of the Bush administration's Iraq strategy. In January, he denounced President George W. Bush's plan for a U.S. troop buildup in Iraq as "the worst foreign policy blunder since Vietnam -- if it's carried out."

Hagel has been among a handful of Senate Republicans supporting legislation that would set an April 30, 2008, deadline for U.S. troops in Iraq to begin withdrawing.

He said his experience in Vietnam and views on the politics of that war influenced his stand on Iraq, which he has visited several times since the 2003 U.S. invasion.

Hagel also showed his maverick side in May by calling for the resignation of Attorney General Alberto Gonzales, who said last month he would step down in September, and by saying the Republican Party had been "hijacked by a group of single-minded, almost isolationist insulationists, power-projectors."

Hagel left political observers bewildered in March when he called a news conference in Omaha to discuss a possible presidential bid. Instead of announcing his candidacy, as widely expected, he said only that he would reveal his plans later.

The race for his Senate seat likely will draw a crowded field. Possible candidates include former Democratic Sen. Bob Kerrey and former Republican Gov. Mike Johanns, the current U.S. Agriculture secretary.

Hagel is a member of the Senate's Foreign Relations, Banking and Select Intelligence committees.

Hagel, a native of North Platte, was elected to the Senate in 1996 and re-elected in 2002. Before politics, he co-founded Vanguard Cellular Systems, which became the second-largest independent cell phone company in the nation.

He also worked as a radio newscaster and talk-show host, an investment banking firm executive and deputy administrator in the Veterans Administration. He served on the staff of Nebraska Republican Sen. John McCollister in the 1970s.

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