Heather Nauert withdrew her name from consideration on Saturday amid concerns about her qualifications for the post.
In a statement, Nauert, a former Fox News presenter, said the decision was made "in the best interest of my family".
She was set to replace Nikki Haley, who announced in October that she would step down from the post by the end of the year.
Critics had highlighted Nauert's lack of adequate foreign policy experience or political skills that was needed for the job.
While making his announcement last December, US President Donald Trump had described Nauert as "very talented, very smart, very quick".
Pakistan steps up diplomatic bid to get US-Iran peace talks on track
Philippines vows to arrest fugitive senator wanted by ICC
UN condemns Israeli decision to establish military facilities in East Jerusalem
Canada PM Carney says Israel's treatment of Gaza flotilla members is 'abominable'
Tankers exit Hormuz as Trump, Vance talk up Iran deal prospects
