"After putting considerable thought into making another run for president, I've decided it is best to give other leaders in the party the opportunity to become our next nominee," Romney told supporters on a conference call.
Romney's exit comes after several of his former major donors and a veteran staffer in the early voting state of Iowa defected to support former Florida Gov. Jeb Bush.
Bush and New Jersey Gov. Chris Christie would have served as Romney's most likely rivals for the support of the Republican Party's establishment-minded voters.
In his call with supporters, Romney appeared to take a swipe at Bush, saying it was time for fresh leadership within the GOP.
"I believe that one of our next generation of Republican leaders, one who may not be as well-known as I am today, one who has not yet taken their message across the country, one who is just getting started, may well emerge as being better able to defeat the Democrat nominee," Romney said. "In fact, I expect and hope that to be the case."
The former governor of Massachusetts, who is 67, had jumped back into the presidential discussion on Jan. 10, when he surprised a small group of former donors at a meeting in New York by telling them he was eyeing a third run for the White House.
It was a monumental change for Romney, who since losing the 2012 election to President Barack Obama had repeatedly told all who asked that his career in politics was over and he would not again run for president.
On Friday, Romney said he had been asked if there were any circumstance under which he would again reconsider. That, he said, "seems unlikely."
"Accordingly, I'm not organizing a PAC or taking donations," he said. "I'm not hiring a campaign team."
The exit of Romney from the campaign most immediately helps those viewed as part of the party's establishment wing, including Bush, Christie, Florida Sen. Marco Rubio and Wisconsin Gov. Scott Walker.
The more conservative side of the field is largely unchanged, with a group of candidates that will likely include Kentucky Sen. Rand Paul, Texas Sen. Ted Cruz, former neurosurgeon Ben Carson and former Arkansas Gov. Mike Huckabee
In the three weeks since the meeting in New York, which caught several in attendance off-guard, Romney made calls to former fundraisers, staff members and supporters, and gave three public speeches in which he outlined his potential vision for another campaign.
"I'm thinking about how I can help the country," he told hundreds of students Wednesday night at Mississippi State University.
In that speech, and what amounted to a campaign stop a few hours before at a barbecue restaurant with Mississippi State football coach Dan Mullen in tow, Romney sounded every bit like a politician preparing to run.
"We need to restore opportunity, particularly for the middle class," Romney said then. "You deserve a job that can repay all you've spent and borrowed to go to college."
But as Romney sounded out his former team about putting together a new national campaign, he discovered that several of his past fundraisers had already made plans for 2016 and were now committed to Bush.
Several key former Romney donors told The Associated Press this week that in Bush they see someone who can successfully serve as president, as they believe Romney could. But they also think Bush has the personality and senior staff needed to win the White House, something the former Massachusetts governor could not bring together in his two previous presidential campaigns.
"I've got great respect for Gov. Romney, and I busted my buns for him," said Chicago investor Craig Duchossois, whose wife contributed $250,000 to a pro-Romney super PAC while he collected tens of thousands more for Romney's last campaign. "But I have turned the page."
Romney also lost one of his most trusted political advisers on Thursday when David Kochel joined Bush's team. Kochel, who led Romney's campaign in Iowa in 2008 and 2012, is in now line to play a senior role in Bush's campaign should he run.
Romney's decision against running clearly pained him, and he took no questions from supporters on Friday's call.
"You can't imagine how hard it is for Ann and me to step aside, especially knowing of your support and the support of so many people across the country," Romney said. "But we believe it is for the best of the party and the nation."