Susan Rice withdrew from consideration for the Secretary of State position on Thursday, citing Republican criticism of her record that had signaled a tough confirmation battle.
In a letter to President Obama, Rice said she could have done the job "ably and effectively," but added that "I am now convinced that the confirmation process would be lengthy, disruptive and costly -- to you and to our most pressing national and international priorities."
Rice will remain as the U.S. ambassador to the United Nations.
In a statement, Obama praised Rice, while criticizing the "unfair and misleading attacks" on her by Senate Republicans and others over the Sept. 11 attack on the U.S. consulate in Benghazi, Libya.
"Her decision demonstrates the strength of her character, and an admirable commitment to rise above the politics of the moment to put our national interests first," Obama said.
Sen. John McCain, R-Ariz., and other Republicans, including South Carolina's Lindsey Graham,had criticized Rice over a string of Sept. 16 television interviews in which she attributed the Benghazi attack to the protest over an an anti-Islam video. Officials later said organized terrorists carried out the attack that killed U.S. ambassador Christopher Stevens and three other Americans.
After the decision became public, Graham issued this statement:
"I respect Ambassador Rice's decision. President Obama has many talented people to choose from to serve as our next Secretary of State.
"When it comes to Benghazi I am determined to find out what happened - before, during, and after the attack. Unfortunately, the White House and other agencies are stonewalling when it comes to providing the relevant information. I find this unacceptable.
"The story of Benghazi is a story of national security failure and we must work to prevent it from ever happening again. I will continue working diligently to get to the bottom of what happened in Benghazi."
President Obama's statement:
"Today, I spoke to Ambassador Susan Rice, and accepted her decision to remove her name from consideration for Secretary of State. For two decades, Susan has proven to be an extraordinarily capable, patriotic, and passionate public servant.
"As my Ambassador to the United Nations, she plays an indispensable role in advancing America's interests. Already, she has secured international support for sanctions against Iran and North Korea, worked to protect the people of Libya, helped achieve an independent South Sudan, stood up for Israel's security and legitimacy, and served as an advocate for UN reform and the human rights of all people.
"I am grateful that Susan will continue to serve as our Ambassador at the United Nations and a key member of my cabinet and national security team, carrying her work forward on all of these and other issues. I have every confidence that Susan has limitless capability to serve our country now and in the years to come, and know that I will continue to rely on her as an advisor and friend.
"While I deeply regret the unfair and misleading attacks on Susan Rice in recent weeks, her decision demonstrates the strength of her character, and an admirable commitment to rise above the politics of the moment to put our national interests first. The American people can be proud to have a public servant of her caliber and character representing our country."