By Ayesha Rascoe

WASHINGTON (Reuters) - Interior Secretary Ken Salazar, who helped lead the government's response to the largest offshore oil spill in U.S. history, will announce he is stepping down from his post, an Obama administration official said on Wednesday.

The former U.S. senator from Colorado came to office pledging to clean up the "mess" at the Interior Department, but it was the massive 2010 BP oil spill in the Gulf of Mexico that ultimately spurred the dramatic overhaul of the nation's offshore drilling regulator.

Salazar's departure comes as President Barack Obama's cabinet undergoes the typical make-over for his second term, and will be part of an opportunity to remake the energy team.

Environmental Protection Agency head Lisa Jackson has announced she will not be staying on. Energy Secretary Steven Chu is also widely tipped to leave.

Salazar is the second Hispanic cabinet member to leave the administration, following last week's resignation by Labor Secretary Hilda Solis.

The Denver Post, which first reported Salazar's move, said President Barack Obama had wanted him to remain at the department, which has a key role in regulating industries such as energy and mining on public lands.

A successor to Salazar at the Interior Department, which manages hundreds of millions acres including national parks and forests, will likely come from a western state, where most federally-owned lands are located.

Potential candidates for the Interior post include outgoing Washington Governor Christine Gregoire, former Senator Jeff Bingaman, who was chairman of the Senate energy committee, and Bill Ritter, former governor of Colorado. All three have also been talked about as in the running for the EPA or the Department of Energy as well.

Salazar is expected to leave the administration by the end of March to return to his Colorado ranch, according to media reports.

Raised on his family's ranch in Colorado, Salazar was often spotted sporting his signature bolo tie and cowboy hat while leading Interior. During his tenure the department established seven new national parks and 10 new wildlife refuges.

The former Colorado attorney general was thrust into the national spotlight in April 2010 when a blowout on the Deepwater Horizon rig caused an explosion that killed 11 workers in the Gulf of Mexico.

In the aftermath, BP's Macondo well spewed more than 4 million barrels of oil into the Gulf, as BP struggled to cap the well for nearly three months.

Facing an unprecedented environmental disaster, Salazar famously pledged to keep a "boot on the neck" of BP during the response efforts.

The catastrophe exposed shortcomings in the government's offshore drilling oversight, with officials conceding that regulations had not kept up with technological advances that allowed drillers to enter deeper and deeper waters.

FIGHTING INDUSTRY

In response to the Gulf spill, the Obama administration implemented a controversial months-long moratorium on deepwater drilling and instituted a raft of new drilling rules aimed at preventing another disaster.

The moratorium, which was followed by longer waits for permits in the Gulf, angered oil and gas drillers, who said the administration was unnecessarily slowing production.

After the spill Salazar also oversaw the transformation of the department's offshore drilling regulatory agency, the Minerals Management Service, which had been accused of being too cozy with industry.

Long before the Gulf spill, the service was plagued by scandal. A 2008 Inspectors General report said employees responsible for collecting royalties were using illegal drugs, having sex and accepting gifts from workers at the oil companies they were hired to oversee.

Under Salazar, the Minerals Management Service was broken into three separate entities, separately focusing on leasing, enforcement and revenue collection.

From early on, Salazar's relationship with the oil and gas industry and with many Republicans in Congress was contentious. Critics accused Salazar of putting up roadblocks to development.

The sharp-tongued Salazar rarely shied from sparring with his opponents. In 2012 he accused Republicans in the House of Representatives of living in a world of "fairy tales and falsehoods" when it comes to energy policy.

(Additional reporting by Steve Holland and Susan Heavey; Editing by Ros Krasny and Vicki Allen)