Mr Scott is the second major Republican figure to drop out of the 2024 primary race, following Mike Pence’s decision to suspend his campaign on October 28.
The senator campaigned on his message of restoring “Christian conservative values,” and peppered his television appearances with Biblical quotations and references to his own faith.
His decision to drop out comes ahead of the fourth Republican television debate on December 6, which requires candidates to have received six per cent of the vote in two national polls, or six per cent in two early-voting states to qualify. They must also have received donations from 80,000 different voters.
Mr Scott’s campaign looked unlikely to reach the polling figures required, and had cancelled his campaign events in Iowa on Saturday and Sunday, citing illness.
On Sunday night, he said he would not immediately endorse another candidate for the Republican nomination.
“I’m going to recommend that the voters study each candidate and their candidacies and frankly, their past and make a decision for the future of the country,” he said.
“The best way for me to be helpful is to not weigh in on who they should endorse.”
Mr Scott, a member of the Senate’s banking committee, has been a South Carolina senator for a decade, after serving in the House of Representatives for two years between 2011 and 2013. He is the only black Republican in the Senate.
Speaking after the last televised debate on Wednesday, Mr Scott denied that he was considering suspending his campaign.
Asked by NBC News whether he would appear at the fourth debate next month, he replied: “I am 100 per cent confident that, 30 days from now, in Alabama, we will be hanging out having a conversation, like: ‘Wow, Tim, you’re actually on the stage’. Of course I’ll be on the stage.”
He added: “What we know is that the voters are just turning their attention towards this election. I’m very optimistic that we can continue to make gains.”
Mr Scott entered the race in May with a $21 million war chest of donations amassed during his decade in the US Senate.
But his campaign has spent significant sums in the last six months, including $14 million on advertising that he has failed to convert into public support.
The remaining candidates are led by Donald Trump, who has the support of around 57 per cent of Republican voters, followed by Ron DeSantis with 14 per cent, Nikki Haley with nine per cent and Vivek Ramaswamy with five per cent.
The Republican primary caucuses begin in Iowa on January 15, beginning a months-long voting process that will culminate in the selection of a candidate at the Republican National Convention in July.