Senior presidential secretary for political affairs Hong Ik-pyo said at a briefing that Lee made the decision after carefully considering a wide range of views and public assessments.
Hong said she "regrettably" did not meet public expectations for the post, despite being a three-term conservative lawmaker.
She had been under pressure to step down after a string of allegations surfaced shortly after Lee tapped her late last month. They include tantrums against subordinates, exposing her anger management problems, as well as suspicious real estate dealings and alleged special treatment of her son during his mandatory military service.
At her confirmation hearing last Friday, after a delay caused by a boycott from the main opposition People Power Party (PPP) over her failure to submit all requested documents, the ministerial nominee sought to defend herself but failed to convince.
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