Former Lebanese finance minister Mohammad Safadi, 75, has withdrawn his candidacy to be prime minister of the next government.
Mr Safadi said it would have been difficult to form a “harmonious” cabinet supported by all parties.
He said he hoped outgoing prime minister Saad Hariri would be designated again for the post.
On Thursday, three of Lebanon's main political parties agreed on the billionaire businessman as their choice to become Lebanon’s new prime minister.
Caretaker Foreign Minister Gebran Bassil, head of the Free Patriotic Movement, had confirmed on Friday that Mr Safadi would be nominated for the post when formal deliberations on forming the next government begin in parliament on Monday.
But on Saturday, Mr Safadi said he had decided to withdraw after consultations with political parties and a meeting on Saturday with Mr Hariri.
"It is difficult to form a harmonious government supported by all political sides that could take the immediate salvation steps needed to halt the country's economic and financial deterioration and respond to the aspirations of people in the street," he said.
The news of the withdrawal came few hours after ratings agency S&P Global lowered Lebanon's sovereign rating further into junk status, stating that diminishing confidence in the country and its economy has led to a reversal of inflows into the country's banks.
The agency cut Lebanon's long and short-term foreign and local sovereign credit ratings to "CCC/C" from "B-/B", and said the outlook on its debt was negative, citing a one-in-three chance of a further downgrade as its next rating action.
Prime minister Mr Hariri resigned last month following several weeks of protests, with citizens blaming Lebanon's political elite for widespread corruption and nepotism, which they say contributed to the country accruing $86 billion (Dh316bn) of public debt, equivalent to 150 per cent of gross domestic product.
After the candidacy announcement on Thursday, there were further protests in Mr Safadi's home city of Tripoli.
Demonstrators gathered in front of one of his properties to protest against his nomination, which they said was the opposite of the changes demanded in a month of protests across the country.
Mr Safadi, who amassed his fortune largely through real estate, is also a retired politician with many alleged corruption cases behind him.
Protesters are demanding a change from the nation's current political elite, whom they consider to be old and corrupt.
Mr Hariri quit as the premier on October 29 in response to protesters' demands for sweeping change in Lebanon's political system and an end to corruption and sectarian cronyism but politicians had been unable to agree on a new cabinet.
Lebanon’s caretaker Defence Minister, Elias Bou Saab, said on Thursday the country was in a “very dangerous situation” and compared recent street unrest to the start of the 1975-1990 civil war.
Rallies have been overwhelmingly peaceful but a protester was shot dead in an altercation with soldiers on Tuesday.