Jolly instead will for reelection to his seat in Congress, citing "unfinished business" in an email to supporters Friday afternoon.
He said he had been convinced to run for Senate by insiders who told him redistricting made his reelection to the House too difficult, but decided he wanted to continue doing the job he has.
The move, though, comes as Rubio has in recent days signaled he might accede to pressure to run for reelection to his seat.
Expectations are growing on Capitol Hill that Rubio, who announced last year that he wouldn't seek reelection, may be getting into the race, according to GOP senators who have spoken with the Florida freshman.
Jolly himself foreshadowed the news Friday morning in an interview with CNN's "New Day," also implying that he believed Rubio would get in the race.
"I have been running for 10 months, we've been polling out front," Jolly said. "Marco is saying he is getting in," he added, apparently referencing rumors to that effect and not indicating Rubio had told him as much.
Jolly spokesman Preston Rudie emailed later Friday, "Clarifying Jolly has no actual knowledge of a Rubio decision."
Jolly had been in a battle to win the Republican nomination for the seat with fellow Florida Rep. Ron DeSantis and Lt. Gov. Carlos López-Cantera as well as other candidates. López-Cantera has also made clear that he will exit the race if Rubio, a personal friend, decides to enter.
Rubio has until June 24 to file for the race. He has said he will go home to Florida and consider the option with his family.
Until recent weeks, when Republicans grew concerned that only Rubio could retain the seat for the GOP, Rubio has repeatedly insisted he will be at least temporarily leaving politics at the end of the year.
The primary will be August 30.