"The voters of Illinois deserve someone who's going to commit not just to a tough campaign but to the more difficult job of governing a state, a state which deserves better," Daley said. "As I surveyed both the rigors of this campaign and the enormity of the challenges of fixing these problems, I've concluded that I cannot commit to what the voters may need."
On Tuesday night, Governor Pat Quinn reacted to Bill Daley's refusal to give him his support.
"I think the most important endorsement is from everyday people who live from paycheck to paycheck," said Gov. Pat Quinn.
Daley's departure from the race apparently means Quinn will have a free pass through the democratic primary in March, and he'll have more money to spend in the general election.
Daley's announcement comes 14 weeks after the former commerce secretary, White House chief of staff, and banker launched an exploratory committee. Daley raised around $800,000 but never opened a single dedicated campaign office.
"You have to be honest with yourself if you're going to take on the challenge of public life," Chicago Mayor Rahm Emanuel said.
"He obviously made a personal decision, one that's best for him and he's within his rights to do that," IL Attorney General Lisa Madigan (D) said.
Madigan, who was once a possible candidate for governor, said Daley's decision to drop out of the race has no effect on her decision not to run.
What does Daley's drop out mean for Quinn?
Daley's campaign never seemed to gain traction against incumbent Illinois Gov. Pat Quinn. Quinn released a statement that he respects Daley's decision and thinks a nasty primary would have only helped Republicans.
With Daley's decision to leave the race, Gov. Pat Quinn got a free ride through the March 2014 Democratic primary and millions of dollars more to spend against Republicans.
"It's a tremendous boost to Governor Quinn. He can build up his war chest. He doesn't have anybody in his own party sniping at him," Sen. Kirk Dillard, Republican candidate for governor, said.
Dillard and other Republican candidates agree on the governor's near term advantage. But they also agree Quinn is vulnerable.
"He is not a leader and has not produced results for the people of Illinois and I think the voters understand that," Bruce Rauner, candidate for governor, said.
Former Ceasefire Director Tio Hardiman, who is campaigning downstate, is incumbent Pat Quinn's remaining challenger.
"That's going to be good as far as my chances of becoming the next governor in the State of Illinois," Hardiman said.
Meanwhile, Republican primary candidate Senator Bill Brady, who introduced former Long Grove Mayor Maria Rodriguez as his running mate, wants to run again against Governor Quinn in the general election.
"That rematch, were it held today, given the misgivings of the Quinn administration, we'd end up on top by a great number of votes," Sen. Brady said.
When asked if he will support Governor Quinn for re-election, Daley said, "I think you just have to look at the record and the voters will decide going forward his future."
Daley plans to give all of his campaign contributions back and go back into the private sector. He's the son of the late Chicago Mayor Richard J. Daley and brother of former Chicago Mayor Richard M. Daley.
"Throughout my life, I have looked forward to serving as an elected official. But that isn't to be. As part of a family that has public service in its blood, and a family in which I am extremely proud, I've always been motivated as each of them to serve," Daley said.