"In the Bible, God tells us for everything there is a season, and for me, for now, this season of being an elected official has come to a close. I do not intend to run for president in 2008," Frist said in a statement.
Frist, a surgeon, had earlier announced he was retiring from the Senate at the end of the year. He said he planned "to take a sabbatical from public life" and would resume his medical mission trips around the world.
The Securities and Exchange Commission has spent more than a year investigating insider trading allegations against Frist, who has denied any wrongdoing. His presidential ambitions were also hurt by the results of the November elections, when the GOP lost six Senate seats and control of the chamber for the first time in six years.
The Tennessee senator's decision caps a 12-year stint in electoral politics in which he rose from an underdog in his 1994 Senate campaign to the position of majority leader a mere eight years later.
The decision leaves Sen. John McCain of Arizona, Massachusetts Gov. Mitt Romney and former New York mayor Rudy Giuliani as the most nationally prominent contenders for the Republican nomination.
Other potential GOP contenders include Sens. Sam Brownback of Kansas and Charles Hagel of Nebraska, Gov. George Pataki of New York and Rep. Duncan Hunter of California.
Frist becomes the most high profile campaign dropout. Earlier this fall, former Democratic Gov. Mark Warner of Virginia also announced he will not run for the presidency in 2008. Warner, like Frist, had begun putting in place a campaign organization to raise money and line up supporters in early caucus and primary states, as well as nationally.
For more than a year, Frist has been under investigation by the SEC regarding allegations of insider trading in connection with the sale of shares in HCA Inc., a hospital chain and health company his father and brother founded. Frist has vehemently denied any wrongdoing, although he has not gained the quick resolution of the issue that he had hoped for.
Frist was a physician with no experience in politics when he challenged Democratic Sen. Jim Sasser. He was swept into office in that year's Republican landslide.
In the 2001-02 election cycle, when Republicans gained seats, Frist headed the Senate campaign committee. He was chosen majority leader after the election when Sen. Trent Lott, R-Miss., was forced to step down after making racially insensitive remarks at a birthday celebration for Sen. Strom Thurmond, R-S.C.
Frist's political action committee, which allowed him to travel and build a donor base, had raised $7.5 million between Jan. 1, 2005, and Oct. 18, 2006. The PAC spent $8.2 million during that period.