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".

US military marks 11th successive night of attacks on Iran
Indian opposition disrupts parliament to support student protesters and pressure Modi
Rubio says US still willing to negotiate over Iran crisis
House fire kills 10 in Peru's capital, including five minors
Ukraine will step up counteroffensive actions, Zelenskyy's new top commander says
