"After this... my candidacy is out of the question," Gul, who was the only candidate standing, said following the decision.
Bulent Arinc, the speaker of parliament, closed the session, saying only 358 members were present.
The presidential elections have exposed a deepening divide between secularists and supporters of prime minister Tayyip Erdogan's ruling AK party.
"Unfortunately deep political crises have heavily stormed the political atmosphere in Turkey"
Mulukan, Ankara, Turkey
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Secularists oppose Gul's candidacy, fearing that Erdogan's party will expand its control and impose religion on society.
Erdogan's ruling party, an advocate of EU membership, rejects the Islamist label.
In an attempt to resolve the crisis, the government has called early general elections for July 22 and is pushing for a change to the constitution to allow the public rather than parliament to elect the president.
Gul said in an interview with The Financial Times on Friday that he would be his party's candidate if the vote went to the people, and said he believed he had the support of 70 per cent of the Turkish public.
The army, however, is also alarmed by the prospect of a former Islamist as head of state and commander-in-chief.
The military establishment has issued a public reminder that it is the ultimate defender of the secular Turkish state.
|Gul's candidacy has energised secular |
Turks opposed to religion in politics [AFP]
Barnaby Phillips, Al Jazeera's correspondent in Ankara, said the military had applied "discreet but effective pressure" to undermine Gul's presidential attempt.
"The military released a statement last week saying that it didn't believe Gul was the right man for the Turkish presidency," he said.
"Probably as a direct result of that, Gul's candidacy has floundered ever since."
Turkey's military has removed four of the country's civilian governments in 50 years, but Phillips said it was unlikely the country would "see tanks on the streets" this time.