"It is with deep regret today I am withdrawing my nomination to be the Secretary of the Army," Mark Green said in a statement.
The decision by Green, Trump's second pick for the post, came after his nomination ran into trouble following a backlash after past controversial statements on LGBT issues, Islam and evolution were revealed.
Green explained his decision to pull out from a military leadership position in the wake of this controversy.
"To meet these challenges, there should be no distractions. And unfortunately due to false and misleading attacks against me, this nomination has become a distraction," he said in his statement.
"Tragically, my life of public service and my Christian beliefs have been mischaracterized and attacked by a few on the other side of the aisle for political gain," he continued. "While these false attacks have no bearing on the needs of the Army or my qualifications to serve, I believe it is critical to give the President the ability to move forward with his vision to restore our military to its rightful place in the world."
Both the White House and Pentagon had told reporters earlier Friday there was nothing to announce regarding Green's nomination.
Green, a retired Army flight surgeon and West Point grad, was tapped in early April as Trump's pick after billionaire Vincent Viola withdrew over issues related to divesting from his financial holdings.
Philip Bilden, Trump's pick to be Navy secretary, also withdrew because he was not able to satisfy the Office of Government Ethics' requirements for divestment without "undue disruption" of his assets.
Green, currently a state senator in Tennessee, faced rising opposition from LGBT activists and Democrats for his past comments about transgender people.
In 2016, Green told a tea party group, "if you poll the psychiatrists, they're going to tell you that transgender is a disease." In 2013, Green blasted President Barack Obama for supporting what he said were "'transvestites in uniform."
Green, who is a former Army doctor, is also a self-identified "creationist" who has delivered a lecture arguing against the theory of evolution.
Green had defended himself from criticism in a Facebook post last week, writing that the "liberal left has cut and spliced my words about terrorism and ISIS, blatantly falsifying what I've said."
Republican Sens. Lindsey Graham and John McCain have also expressed concern over Green's past comments.