* Obama hails Coburn as a friend and lawmaker
* Republicans expected to retain his Senate seat (Updates with recast lead, Obama comments, special election will be held)
By Thomas Ferraro
WASHINGTON, Jan 17 (Reuters) - Republican U.S. Senator Tom Coburn of Oklahoma, who crossed the aisle in 2005 became friends with a newly elected colleague named Barack Obama, says he will leave office in December, two years before his term ends. He is battling cancer.
In a brief statement issued by his office late on Thursday, Coburn, 65, a medical doctor, said: "This decision isn't about my health, my prognosis or even my hopes and desires."
Instead, he said: "As a citizen, I am now convinced I can best serve my own children and grandchildren by shifting my focus elsewhere. In the meantime, I look forward to finishing this year strong."
Obama said in a statement on Friday: "Those of us who have had the privilege of serving with Tom Coburn will be sad to lose him as a colleague here in Washington."
"Tom and I entered the Senate at the same time, becoming friends after our wives struck up a conversation," Obama said.
"Though we haven't always agreed politically, we've found ways to work together," Obama said. "The people of Oklahoma have been well-served by this 'country doctor from Muskogee.'"
In nine years in the Senate, Coburn earned a reputation as a blunt-speaking conservative who waged war against federal waste and denounced what he called a "dysfunctional Washington."
Coburn promised to serve only two terms in the Senate when first elected to the chamber in 2004. He earlier served six years in the House of Representatives.
"Our founders saw public service and politics as a calling rather than a career," Coburn said in his statement on Thursday. "That's how I saw it when I first ran for office in 1994, and that's how I still see it today."
Coburn has been treated for prostate cancer. According to his Senate website, he is a three-time cancer survivor.
A special election to fill Coburn's seat will be held in Oklahoma. The seat is likely to remain in his party's hands since the state is staunchly Republican.
Senate Republican Leader Mitch McConnell, responding to Coburn's decision to leave the Senate early, hailed him as an "extraordinary man and a deeply serious lawmaker."
"Tom Coburn is without question one of the most intelligent, principled, and decent men in modern Senate history," the Kentucky lawmaker said in a statement.
(Additional reporting by Sharon Bernstein and Eric M. Johnson; Editing by Lisa Shumaker, Ken Wills, W Simon and Gunna Dickson)