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".

Afghan Taliban says 400 killed in Pakistan air strike on Kabul hospital
Bomb attacks kill at least 23 in Nigeria's Maiduguri
Five countries warn against major Israeli ground offensive in Lebanon
Fire breaks out at Qatar's industrial area after missile interception
Kuwait arrests Hezbollah-linked cell in security crackdown
