Freeman withdrew Tuesday after facing strong opposition from Senate Republicans who raised questions about his objectivity and experience, The Hill reported.
Dennis Blair, director of national intelligence, said in a statement he accepted Freeman's decision "with regret."
Feinstein, chairwoman of the Senate Intelligence Committee, said she talked with Blair, who told her he thought Freeman was qualified for the position.
"I feel presidents should have their choice if possible of appointments," Feinstein told the Washington publication. "I've read Mr. Freeman characterized in a number of different of ways. We'd like an opportunity to talk with him and get our own fix on these views. How strongly they're held, whether in fact there is bias."
Sen. Kit Bond, R-Mo., the Republican vice chair of the committee, and six other Republicans on the panel wrote a letter to Blair in which they expressed concern over the possible appointment of Freeman.
Because he is an appointee, the Senate does not have the formal power to reject Freeman as they would a presidential nominee. However, the Republicans' letter led to Freeman withdrawing from consideration, The Hill reported.