He said he would not appeal or run a write-in campaign.
"I just don't think it's a viable path to winning," Duggan said in his campaign office, surrounded by supporters who began and ended the press conference with chants of, "We like Mike!"
"I'm not leaving the city, but I don't see running for office right now," he said. "'The damage [to the campaign] ... I think is too much to overcome."
Duggan took time to praise his campaign team, and said he owed it to his supporters not to put them through more hardship by continuing to fight to remain on the ballot.
"We all saw things the same way," he said. "We saw the city we love in distress and we thought we could help."
Until recently, Duggan, former CEO of Detroit Medical Center and a one-time Wayne County prosecutor, was one of the top contenders of more than a dozen in the mayoral race.
A staunch critic of Gov. Rick Snyder's (R) decision to appoint an emergency manager for the city, who has an 18-month term, he said that aiding Detroit's financial stress was one of the reasons he chose to run for mayor. He noted not being able to restore the mayor's office to the position of running the city as one of his regrets.
"Had I been there I probably could have successfully moved the emergency manager out," he said.
Duggan's campaign was jeopardized last month when opponent Tom Barrow, who has previously run for election and lost, called for his disqualification based on the premise that he had not met the residency requirement for office as outlined by the city's charter, which was instated in 2012.
The Detroit Election Commission voted 2-1 to keep Duggan on the ballot, but Barrow requested an emergency hearing. Wayne County Third Circuit Court Chief Judge Pro Tem Lita M. Popke ordered Duggan off the ballot. Though he pledged to fight, the Michigan Court of Appeals upheld Popke's decision, voting 2-1 Tuesday to bar Duggan from the ballot.
The city charter, which Detroiters voted into place in 2011, requires a year of residency for candidates for political office. The commentary included in the charter states that it is to make it "more likely that elected officials will be intimately familiar with the unique issues impacting their communities."
Though Duggan has been a registered voter in the city since April 16, 2012, the language of the charter calls for a candidate to have been a resident a year prior to the date they file for office, which for Duggan was April 2, 2013.
On Wednesday, he said he had interpreted the charter, which he called out for having "flaws," in the same way that others in the city had, including the City Clerk.
"Never in my wildest dreams did I think you could get knocked off a ballot for filing too soon," he said. "I should have held the petitions two weeks longer ... but I don't blame anyone else for that."
When NAACP Detroit General Counsel Butch Hollowell spoke to The Huffington Post earlier in Duggan's defense, he argued that Duggan had followed the spirit of the code by having been a resident for more than a year since the filing deadline for candidates, which was in mid-May.
"That's 13 months of residency," he said. "It's obvious from the charter and the commentary under the charter provision that the intent is to make certain that the candidate is a bonafide resident. There is no question as to whether Duggan met that one year requirement."
Barrow previously said it was Duggan's responsibility to pay attention to those details.
"I would have thought everybody would have read the law," he said. "It's just sloppiness."
But Duggan, who did not say if he would be endorsing another candidate Wednesday, implied that all the attention to detail in the world wouldn't help Barrow win the mayor's seat.
"Tom Barrow's ambition in life is to be mayor of Detroit," he said. "And letting the voters make the decision hasn't really worked out for him."
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