“After much prayer and deliberation, I have decided to suspend my campaign for president, effective immediately,” he said.
“I will never leave the fight for conservative values, and I will never stop fighting to elect principled Republican leaders to every office in the land, so help me, God.”
His decision to drop out comes more than two months before the Iowa caucuses, a state with a large white evangelical population that Mr. Pence had staked his campaign on.
It also saves the former US Vice President from the embarrassment of failing to qualify for the third Republican primary debate on November 8 in Miami.
“We always knew this would be an uphill battle, but I have no regrets,” he added.
Mr. Pence is the first significant contender to withdraw from a race where his former employer, Donald Trump, has turned against his vice president after losing the 2020 election to Joe Biden.
The Former US Vice President refusal to carry out the plan infuriated Mr. Trump, and the former president’s supporters painted him as a traitor.
Over the course of his campaign, Mr. Pence failed to attract enough anti-Trump voters from the party to sustain a candidature that languished in the low single digits in opinion polls.
Mr. Trump, meanwhile, has built one of the biggest primary opinion poll leads in US electoral history.
While Mr. Pence did not throw his backing behind another candidate in his speech on Saturday, he may have taken a swipe at Mr. Trump when he called on Americans to select someone who can lead with “civility”.
Despite years of connections, Mr. Pence struggled to attract donors and ended September with just $1.18 million (£990,000) in the bank, which is far less than some of his rivals.
He is also $621,000 (£512,000) in debt, according to his most recent campaign filing.