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".

UK, France, others state Gaza humanitarian deterioration of serious concern
China encircles Taiwan in massive military display
Kremlin says Russia is toughening its stance on Ukraine after drone attack
Turkey detains 357 ISIS suspects nationwide after deadly clash
Israel defends Somaliland move at UN amid concerns over Gaza motives
