The former London mayor’s decision not to join the battle leaves Home Secretary Theresa May as hot favourite to be the next Prime Minister.
It came after the shock announcement by fellow Brexit campaigner Michael Gove - who had widely been expected to be Mr Johnson’s running mate - that he was putting himself forward for the leadership.
In a press conference just moments before the deadline for nominations passed, Mr Johnson said that the next Tory leader would have to unify his party and ensure that Britain stood tall in the world.
And he said: “Having consulted colleagues and in view of the circumstances in Parliament, I have concluded that person cannot be me.”
Earlier, Mr Gove said: “I have repeatedly said that I do not want to be prime minister. That has always been my view. But events since last Thursday have weighed heavily with me,” he said.
“I respect and admire all the candidates running for the leadership. In particular, I wanted to help build a team behind Boris Johnson so that a politician who argued for leaving the European Union could lead us to a better future.
“But I have come, reluctantly, to the conclusion that Boris cannot provide the leadership or build the team for the task ahead.
“I have therefore decided to put my name forward for the leadership. I want there to be an open and positive debate about the path the country will now take. Whatever the verdict of that debate I will respect it. In the next few days I will lay out my plan for the United Kingdom which I hope can provide unity and change.”
The declaration is a devastating blow for Mr Johnson, who was expected to stand with the backing of the Justice Secretary.
Mr Johnson will use his launch speech to present what was described as a “positive, optimistic vision” of Britain outside the EU, offering “a chance to believe in ourselves”.
Theresa May formally launched her campaign this morning with a promise that she can offer “leadership that can unite our party and our country”.
The Home Secretary is hot favourite to make it onto the ballot paper alongside Mr Johnson in the final run-off vote.
Mrs May - who will fight on her record as a hard-headed and serious long-serving holder of one of the Cabinet’s most difficult posts - hit out at her probable main rival with a newspaper article in which she warned that politics is “not a game”.
Setting out her proposed programme in a speech in London, Mrs May - who was a low-key supporter of Remain during the referendum - made clear she will not attempt to back away from last week’s vote to leave the EU, saying “Brexit means Brexit”.
But she said she would not kick-off the two-year process of negotiating withdrawal until the UK’s negotiating strategy is agreed - probably not before the end of this year. She said that she would create a new Government department, headed by a Cabinet-level minister who had campaigned for Leave, to oversee the UK’s departure from the EU.
She said she would not order an emergency budget in response to the Brexit vote and would not call a snap election ahead of the scheduled date of 2020.