Bush bypassed the Senate and appointed Bolton to the UN job on a temporary basis in August 2005 despite protests that he would pursue a unilateral foreign policy.Bolton had a history of angering diplomats and colleagues in his previous state department job and his nomination has languished in the Senate Foreign Relations Committee for more than a year, blocked by Democrats and several Republicans.
The Democratic takeover of the Senate in elections in November made the path even more difficult.
Bush said in the presence of Bolton and his wife: "I think he deserved to be confirmed. And the reason why I think he deserved to be confirmed is because I know he did a fabulous job for the country."
Juergen Trittin, a former environment minister and deputy head of the opposition Greens in the German parliament, said: "The bull is leaving the china shop of multilateral politics. This is good news for the world and the US."
"The bull is leaving the china shop of multilateral politics. This is good news for the world and the US"
Juergen Trittin, former environment minister
The White House re-submitted Bolton's nomination last month.
Democratic Senator Joe Biden, the incoming chairman of the Senate Foreign Relations Committee, said he saw "no point in considering Mr Bolton's nomination again".
While Bush could not give Bolton another appointment, the White House was believed to be exploring other ways of keeping him in the job.
However, Dana Perino, the White House deputy press secretary, said that Bolton informed the White House that he intended to leave when his current appointment expires.
As late as last month, Bush, through his senior aides, said he would not relent in his defence of Bolton, despite opposition from Democrats who view him as too combative for international diplomacy.
Perino said that among Bolton's accomplishments, he assembled coalitions addressing North Korea's nuclear activity, Iran's uranium enrichment and reprocessing work and the violence in Darfur.
"No point in considering Mr Bolton's nomination again"
Joe Biden, democratic senator
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She said he also made reform at the United Nations a priority because the US was searching for a more "credible" and more "effective" United Nations.
"Despite the support of a strong bipartisan majority of senators, Ambassdor Bolton's confirmation was blocked by a Democratic filibuster, and this is a clear example of the breakdown in the senate confirmation process," she said.
"Nominees deserve the opportunity for a clean up or down vote. Ambassador Bolton was never given that opportunity."
Perino said Bush had reluctantly accepted Bolton's decision to leave when his current appointment expires.