Bin Hammam, 61, who launched his campaign on an anti-corruption platform and waged a bitter war of words with the long-serving Blatter, said on his blog that he was withdrawing for the sake of FIFA''s reputation.
"I made the decision to run for the FIFA presidency because I was and remain committed to change within FIFA," he said.
"However, recent events have left me hurt and disappointed -- on a professional and personal level," bin Hammam, currently the head of the Asian Football Confederation, added.
"It saddens me that standing up for the causes that I believed in has come at a great price -- the degradation of FIFA''s reputation. This is not what I had in mind for FIFA and this is unacceptable."
"It is for this reason that I announce my withdrawal from the presidential election," he said.
He did not want his decision to be linked to the investigation by the FIFA ethics committee, he added, vowing to clear his name of the "baseless allegations" against him during his appearance before the committee.
Bin Hammam''s statement was the latest dramatic twist in the battle for the top job in football, during which he himself made corruption allegations against his rival, 75-year-old Blatter.
The two men had been due to face off in a June 1 election for control of world football. MORE (AFP) PDS