Seoul , South Korea ( CNN ) -- South Korean presidential candidate Ahn Cheol-soo announced Friday that he is dropping out of the race , clearing the way for fellow left-leaning hopeful Moon Jae-in to face Park Geun-hye , the candidate for the governing Saenuri Party . Ahn had been working with Moon , of the Democratic United Party , to merge their presidential bids ahead of next month 's election , but the two had failed to reach an agreement . Read more : South Korea 's ruling party taps Park for presidential bid . `` I am giving up my presidential candidacy , '' South Korean news agency Yonhap quoted Ahn as saying . `` From now on , Moon Jae-in is the single liberal candidate . '' The race will determine who will lead South Korea , a key U.S. ally in Asia , for the next five years amid long-running tensions with the unpredictable , nuclear-armed North . The current South Korean president , Lee Myung-bak of the Saenuri Party , is prevented by the constitution from running for another term . Both Park and Moon are expected to pursue a more conciliatory line toward North Korea than Lee , who took an uncompromising approach to dealings with Pyongyang . Read more : South Korean military embarrassed after defector from North knocks on door . Popular among conservative voters , Park has said she aims to focus on welfare policies . If elected , she would become the country 's first-ever female president . She is a daughter of former president Park Chung-hee , who stirs mixed feelings among South Koreans . Some claim he was a dictator who stifled opposition ; others credit him with overseeing a key phase of South Korea 's economic development . He was shot and killed by his intelligence chief in 1979 . Ahn , who founded an anti-virus software company , had gained popularity for his criticism of the large South Korean conglomerates , known as `` chaebols . '' He has argued that the nation 's economy is dominated by a few rich individuals . He is a professor at South Korea 's prestigious Seoul National University and a former medical doctor . Moon , a close ally of late president Roh Moo-hyun , is a former human-rights lawyer who was jailed in the 1970s by Park 's father . CNN 's KJ Kwon contributed to this report .
Park Geun-hye Cheol-soo had been working with Moon to merge their bids . `` From now on , Moon Jae-in is the single liberal candidate , '' Ahn says . Ahn will face governing party candidate Moon Friday .