This brought to an end a political campaign that saw him lose his front-runner status after failing to win any of the early election contests for the Democratic nomination.
"I am no longer actively pursuing the presidency," Dean told a crowd of supporters in his home state on Wednesday.
Dean's departure from the presidential race comes after he failed to win any of the early election contests for the Democratic party's presidential nomination, with the most recent shutout occurring in Tuesday's Wisconsin primary.
Despite going 0-for-18 in Democratic primaries and caucuses held so far, the former country physician has been a defining figure this election year, and his departure reshapes the quest for the Democratic presidential nomination, creating a two-man contest between US senators John Kerry and John Edwards.
Dean, a onetime front-runner who ignited the presidential
campaign last year with his fiery criticism of the war in Iraq,
raised tens of millions of dollars over the internet and drew in
millions of disenfranchised voters.
But his insurgent effort sputtered and failed following an election defeat in Iowa, the first nominating contest a month ago and was never able to recover.
A subdued Dean eulogised the accomplishments of his campaign and said he would found a political movement to continue to press many of the same issues he advocated during his presidential campaign.
"I am no longer actively pursuing the presidency"
former Vermont governor
"What we did show is that by standing up and telling the truth and not worrying about polls and focus groups, you could actually get support in this country from voters," he told supporters.
"The new approach, planting seeds on the internet, strengthening grassroots, face-to-face obtaining support from hundreds of thousands of small donors - all these steps can revitalise our democracy and return power to ordinary Americans," he said.