Patrick Shanahan, who has been acting defence secretary since January, cited a “painful and deeply personal family situation” that led to his decision to step down.
It came after months of unaccounted delays to the process, which was overshadowed by questions about Mr Shanahan’s eligibility for the role, potential conflicts of interest, and reports of domestic violence incidents.
In a tweet, Donald Trump praised the 56-year-old for doing a “wonderful job”, but said he had stepped down in order to “devote more time to his family”.
The US president has since appointed army secretary Mark Esper as the acting defence secretary replacement.
He said: “I know Mark, and have no doubt he will do a fantastic job!”
Mr Shanahan, an ex-Boeing executive, did not give specific reasons for his resignation, but reports later published in US media said the FBI had been looking into domestic violence disputes from 2010 and 2011.
It was part of the routine background checks ahead of Mr Shanahan’s possible assignment to the defence secretary job.
According to USA Today and the Washington Post, the investigation related to an incident in which Mr Shanahan and his ex-wife Kimberley Jordinson accused the other of punching them.
Mr Shanahan rejects the accusation from Ms Jordinson.
Another incident involved Mr Shanahan defending the actions of his then-17-year-old son, who hit his mother in the head with a baseball bat, fracturing her skull and elbow.
The Washington Post quoted Mr Shanahan as writing in a memo at the time that his son had “acted in self-defence”.
In his statement, Mr Shanahan said a continuation of the confirmation process would force his three children to “relive a traumatic chapter” of their family life “and would reopen wounds we have worked for years to heal”.
He added: “Ultimately, their safety and wellbeing is my highest priority.”