The towering sports star's decision leaves the crisis-hit nation of 46 million with two clear frontrunners in the May 25 vote -- business baron Petro Poroshenko and the highly divisive and corruption-stained opposition leader Yulia Tymoshenko.
The 42-year-old Klitschko conceded to fellow members of his aptly-named UDAR (Punch) party that he had slipped badly in public approval ratings in the tumultuous weeks following the February 22 ouster of pro-Kremlin president Viktor Yanukovych.
"This has to be a candidate who enjoys the strongest public support. Today, this candidate in my opinion is Petro Poroshenko."
Klitschko added that he planned to run for mayor of Kiev in elections that will be held alongside the presidential polls.
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The former heavyweight champion -- a proponent of closer European ties who was stripped of his title belt in December for spending too much time at the barricades instead of the boxing ring -- is a national hero in his home country who now leads the third-largest party in parliament.
But a survey published by four respected Ukrainian research firms this week put him second in the presidential ratings with less than nine per cent of the vote.
Poroshenko -- the only prominent Ukrainian tycoon to join protesters at the Kiev barricades -- ranked first with the backing of almost a quarter of the respondents.
Some analysts believe that support for Klitschko subsided once Yanukovych left power as voters began to look for other candidates with similar pro-Western leanings but who had more experience in politics and administrative affairs.