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".
Air Canada Express plane hits ground vehicle at New York's La Guardia airport
Kuwait launches probe into espionage, state security cases
Trump, Iran threaten to escalate conflict with attacks on energy and water facilities
Ambulances from Jewish community organisation torched, UK police say
Israeli airstrikes kill four in Gaza, Palestinian officials say
