"One of the things I always thought in my career that I wanted to do, I thought I would be able to have that opportunity, I hoped, would be to run for office. And even though you're around it for a long time, you really don't get a sense of the enormity of it until you get into it," the 65-year-old Democrat told the Chicago Tribune.
"But the last six weeks or so have been really tough on me, struggling with this. Is this really me? Is this really what I want to spend my next five to nine years doing? And is this the best thing for me to do at this stage of my life? I've come to the conclusion that this isn't the best thing for me."
Daley served a year as President Obama's chief of staff and was commerce secretary under President Clinton. He also served as manager of Al Gore's unsuccessful presidential campaign. His father and brother served as mayor of Chicago.
The Tribune said Daley's decision is expected to be a boon for Democratic incumbent Pat Quinn, though other Democrats could step forward to challenge Quinn, who Daley said would likely lose to the Republicans' candidate in November 2014.
"There's no doubt in my mind that Pat Quinn will not be the next governor of Illinois," Daley said. "This governor is not that strong that somebody should fear running against him."