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Ali Asghar Soltanieh said Iran wanted to make way for its regional ally Syria to become a board member instead.
Iran and Syria have both been accused by some countries of engaging in clandestine nuclear activity.
Iran says it will continue enriching uranium, which it says is for civilian purposes only, despite the latest UN resolution calling on it to stop.
"The Islamic Republic has officially refrained from pursuing its right to be nominated to the board to pave the way for the membership of Syria," Mr Soltanieh said in remarks carried by the state-run al-Alam website.
The International Atomic Energy Agency board comprises of 35 members elected annually by the body's highest policy-making body, the General Conference of all member states.
Syria and Iran had both been competing for the seat reserved for a Middle Eastern and South Asian country.
US allegations
Opposition to Syria's election - and Iran's before it's withdrawal - is led by the US, which wants the seat to go to its close ally Afghanistan.
Unless the regional group can agree on a single candidate, the assembly will hold a vote at the end of this week's conference.
Correspondents say it would be an unprecedented and highly divisive move in a body that prides itself on consensus.
Syria has the backing of the Arab League, which makes up a significant proportion of the regional group.
The International Atomic Energy Agency has been investigating Syria over US intelligence allegations that it was building a secret, plutonium-producing reactor.
Israel destroyed the site in an air strike in 2007.
Preliminary inspections by an IAEA team have shown no evidence of the US allegations. Syria denies any nuclear proliferation or hiding any activities from the watchdog.
(BBC)
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