Ricketts, whose family owns the Chicago Cubs and spent about $1 million in helping to elect Trump, struggled to reconcile his family's complicated finances with the Office of Government Ethics.
"He wanted to serve, but couldn't untangle all of the finances," a person close to Ricketts told CNN.
The announcement of Ricketts to serve in the number two position at the Department of Commerce, which Trump made back on November 30, was among the earliest decisions made by the President-elect. But nearly five months later, Ricketts had yet to face a confirmation hearing in the Senate because his financial paperwork had not been approved by the ethics office.
"I am deeply honored that President Trump nominated me to serve as deputy secretary of commerce," Ricketts said in a statement. "I offer my continued support for President Trump and his administration and the important work they are doing to promote economic opportunity. I hope there are other opportunities to contribute to his administration in the future."
The decision by Ricketts leaves Commerce Secretary Wilbur Ross without a top deputy.
The Trump administration has been slow to form, in part, because his selections have included a number of millionaires and billionaires with complicated financial portfolios.
Philip Bilden, the nominee for secretary of the Navy, withdrew in late February because he said he could not satisfy ethics requirements without "undue disruption" to his private finances. Bilden had recently retired from a private equity investment management firm.
Weeks earlier, Vincent Viola, the nominee for secretary of the Army, also shunned an administration job. Viola cited "insurmountable" trouble separating himself from his business ties.
The Ricketts family also would have had to divest some of its holdings because of the overlap with areas overseen by the Commerce Department.
"It would have been impossible for the family to do all of this," the person said.
The White House could have offered a waiver for any of these nominees, but the President has declined to do so.
Ricketts hails from one of the Republican Party's most prominent families. His parents, Joe and Marlene Ricketts, initially supported Gov. Scott Walker of Wisconsin, but ultimately spent $1 million in television ads attacking Hillary Clinton. His brother, Gov. Pete Ricketts of Nebraska, has been a vocal supporter of Trump.
Aside from the Cubs, the Ricketts family also oversees a hefty political operation that has brought together donors looking for well-respected stewards of their cash.
The Ricketts family in recent months has forged a particularly close relationship with Sheldon Adelson, the Las Vegas casino magnate, and was entrusted during the campaign to spend Adelson's cash as part of a pro-Trump effort run through a super PAC called Future 45, which the family ran.
A White House official said the President would announce a deputy commerce secretary soon.