"If I fight on in my campaign, all the way to the convention, I would forestall the launch of a national campaign and make it more likely that Senator Clinton or Senator Barack Obama would win," Romney said.
"And in this time of war, I simply cannot let my campaign, be a part of aiding a surrender to terror," he said.
Super Tuesday losses
Romney made the decision after his chief rival, Sen. John McCain, won multiple Super Tuesday primary and caucus victories this week, and former Gov. Mike Huckabee -- who was thought locked out of a two-man GOP race -- had a surprisingly strong Super Tuesday performance.
The former Massachusetts governor said he was dropping out of the race because he doesn't want to see the Democrats win in November.
"If this were only about me, I would go on. But it's never been only about me. I entered this race because I love America, and because I love America, in this time of war, I feel that I must now stand aside, for our party and for our country," Romney said.
"I will continue to stand for conservative principles," he said, "We cannot allow the next president of the United States to retreat in the face of evil extremism."
Romney and McCain have fought over who is more conservative in recent weeks, with Romney repeatedly calling himself a "Ronald Reagan" Republican.
But now it appears more likely than ever that the Republican presidential nominee will be McCain.
Early GOP favorite
With his good looks and vast personal fortune, Romney was an early favorite to win the Republican nomination. The venture capitalist turned politician banked on strong performances in Iowa and New Hampshire to steam roll his way to the nomination.
This fall, Romney was leading in the polls in both states, and frequently refrained that "no one has ever won both" referring to Iowa and New Hampshire, suggesting he was poised to become the unstoppable candidate.
Early on he tried he head off questions about his Mormon religion by delivering a speech designed to assuage the concerns of Christian evangelicals.
"If I am fortunate to become your president, I will serve no one religion, no one group, no one cause and no one interest. A president must serve only the common cause of the people of the United States," Romney said in December in Texas.
Fall from the top
Romney led polls until Huckabee saw a late surge among evangelical Christians to win in Iowa, and McCain, after a near collapse early in his campaign, saw his own late surge in New Hampshire.
After being buoyed by a win in his home state of Michigan, Romney lost both South Carolina and Florida to McCain.
Romney had hoped to pull out a strong performance Tuesday, trying to present himself as the conservative alternative to McCain.
In the days before February 5, Romney campaign hard against frontrunner McCain, trying to tie his record to that of Clinton and Obama and paint him as a liberal.
"If there's a race between a Republican acting like a Democrat and a Democrat, the Democrat always wins, Romney argued in Glen Ellyn, Illinois, arguing McCain is "virtually indistinguishable from Hillary Clinton or Senator Obama on a number of major issues."
But despite the acrimonious rhetoric and the millions of his own fortune he poured into his campaign, the former governor won only a handful of Super Tuesday primaries and caucuses this week.
McCain swept the Super Tuesday primaries and caucuses, winning many winner-take-all and delegate-rich states and winning key victories in California, New York, Illinois, Arizona, Connecticut, Delaware, Oklahoma, New Jersey and the classic bellwether state of Missouri.
Huckabee's evangelical support
But it was Huckabee who may have done the most damage to Romney's bid.
Romney's chief problem was the extent to which Huckabee siphoned conservatives away from him, opening the door to McCain, reports ABC News' Gary Langer.
Across primaries on Tuesday, Romney won conservatives, with 39 percent. But Huckabee got 23 percent of conservatives. Had the lion's share of them gone to Romney instead, he'd likely have had a better night.
Romney, worth a reported 250 million dollars, contributed at least 35 million to his campaign through the end of 2007.
Romney argued in November in Columbus Junction, Iowa: "I'm convinced in the final analysis as we go through this primary process and as we go through Iowa and Wyoming and New Hampshire and Nevada and South Carolina and Michigan, Florida and then on to Feb. 5th, that the process will select a person who can most effectively change Washington and deal with the future."
It appears they did, but that person wasn't Romney.
ABC News' John Berman and Gary Langer contributed to this report.