Casillas announced a bid to contest the presidency in February.
The former Real Madrid goalkeeper was due to contest incumbent Luis Rubiales in August’s elections but he has cited the impact of the coronavirus pandemic as a contributing factor in his decision to withdraw.
Spain is one of the worst affected countries during the pandemic, with over 290,000 confirmed cases and 27,136 deaths.
"This (coronavirus pandemic) makes the elections take a back seat," Casillas said on Twitter. "I think it is time to add and not divide."
"I wanted a fair, transparent and truly participatory electoral process, looking for the best for Spanish football," he added.
"I hope that in the next elections it can happen with me or with other candidates."
Casillas is still contracted to FC Porto, where he has played since leaving Los Blanco in 2015.
Casillas suffered a heart attack in May last year and is yet to return to the field, though he has not formally retired from the game.
Casillas,39, is widely considered as one of the greatest goalkeepers of his generation.
In 16 years at Real Madrid between 1999 and 2015, Casillas won three UEFA Champions League trophies, five Spanish La Liga titles and two Copa del Reys, amongst numerous other trophies.
Casillas, who holds the record for most appearances in the history of the UEFA Champions League (177), captained Spain to win the European Championships in 2008 and 2012 as well as the FIFA World Cup in 2010.
