Speaking in South Carolina, Mr Huntsman endorsed the candidacy of former Massachusetts Governor Mitt Romney.
Mr Huntsman received just 17% of the vote in the New Hampshire primary despite campaigning extensively there.
He has struggled to build momentum in South Carolina, where the conservative vote is traditionally strong.
The Palmetto State goes to the polls on Saturday to pick a candidate for the Republican nomination.
The Huntsman campaign had difficulty gaining traction nationally, attracting about 1% to 2% in most opinion polls.
As he announced his withdrawal from the race, Mr Huntsman, who pitched himself at his campaign launch as a "civil" candidate who would not play dirty, bemoaned the state of the Republican contest.
By Mark MardellBBC North America editor
Read Mark's thoughts in full
Profile: Jon Huntsman
"This race has degenerated into an onslaught of negative and personal attacks," he said, calling on the Republican party to unite behind a single candidate.
"Divisiveness is corrosive," he added, saying that the "the current toxic form of our political discourse does not help our cause".
Mr Huntsman, 51, is a fluent Mandarin speaker and served as US President Barack Obama's first ambassador to China.
In the early 1990s he became the youngest head of a US diplomatic mission for a century when he was appointed ambassador in Singapore.
Mr Huntsman's withdrawal from the race came the morning after he received an endorsement from The State, the largest newspaper in South Carolina.
They called Mr Huntsman and Mr Romney the "two sensible, experienced grown-ups in the race'', but said the former ambassador was "more principled" and offered "a significantly more important message''.
Mr Huntsman threw his support behind Mr Romney, calling him the candidate most likely to defeat President Obama in November's presidential elections.
Acknowledging differences between him and Mr Romney - whom Mr Huntsman sharply criticised in recent weeks - he said he would nevertheless support the former Massachusetts governor.
Grover Norquist, a prominent advocate for tax reform, writes in Politico's The Arena that "there was a possible Huntsman strategy. He just needed to get started earlier... He could have been Wisconsin's Scott Walker before Walker. He could have been Chris Christie."
But The Washington Post's The Fix wonders whether there was ever a way for the Huntsman campaign to have influenced the race: "He needed a vulnerable Romney. And Iowa was the entire field's best chance to show that Romney's front-runner status was shaky at best. Huntsman couldn't have beaten Romney in Iowa, but he could have kept the former Massachusetts governor from winning."
Meanwhile, The Caucus blog at the New York Times questions how much of an impact Huntsman's backing will make to the Romney campaign: "The endorsement may not significantly change the shape of the race, but it could inject a new dynamic into a debate Monday night on the Fox News Channel."
Paul West writes in the LA Times that the Huntsman campaign probably failed to meet its own targets: "It's unlikely that Huntsman met his own goals as a presidential candidate, and an argument can be made that he did virtually nothing to advance his future prospects. That would be particularly true if Romney is elected and declines to offer him a decent job."
Differences within the Republican party were less important, Mr Huntsman said, than what he termed a grave crisis facing the US.
In the wake of Mr Huntsman's endorsement, Mr Romney said: "I salute Jon Huntsman and his wife Mary Kaye. Jon ran a spirited campaign based on unity not division, and love of country. I appreciate his friendship and support."
But Mr Santorum dismissed the endorsement, saying it came as no surprise. "Moderates are backing moderates," he said. "I anticipated that actually sooner than today."
Mr Romney won nearly 40% of the vote in the New Hampshire primary and won the Iowa caucuses with a narrow lead of eight votes.
Mr Huntsman's exit from the race leaves five candidates remaining: Rick Santorum, Ron Paul and Newt Gingrich as the three main candidates chasing Mr Romney's lead, and Rick Perry trailing in the polls.
The candidates were meeting voters in South Carolina's Myrtle Beach, with Mr Paul returning to the campaign trail after a four-day break, ahead of a national debate to be hosted by Fox News.
Polls show that South Carolina's conservative vote has not yet settled on one particular candidate.
"I think the only way that a Massachusetts moderate can get through South Carolina is if the vote is split," Mr Gingrich said on Sunday.
A group of five faith leaders endorsed Mr Gingrich while emphasising that support was still split across the influential voting bloc.
Mr Santorum also worked through the weekend to encourage evangelical Christian voters to choose his candidacy, telling reporters on Monday: "I think it's important that we eventually consolidate this race."
However, correspondents say momentum in the Romney campaign is building and an Insider Advantage opinion poll released on Monday shows the former businessman maintaining a significant lead over the rest of the field.
Mr Gingrich, Mr Santorum and Mr Perry have all suggested that Mr Romney's campaign is benefiting from the fractured social conservative support base.
Former Utah Governor Jon Huntsman has ended his presidential campaign, saying that "negative and personal attacks" have marred the Republican race.