In a statement, Ismail said her decision to withdraw complies with the party's general assembly, which refused in a meeting on Tuesday to allow her to participate in the elections due to be held in December.
Ismail, who announced in September her intention to run for president in the upcoming elections, asserted that the party’s organizational bylaws apply to all members, including herself.
Ismail, 57, a well-known news anchor turned political activist, said she acceded to her party's decision despite her desire to be the first woman to run for president in the country's history.
"I could have run for elections as an independent candidate, but I chose to run as head of Al-Dostour to develop the party's political performance," the statement quoted Ismail as saying.
She also said her supporters were subject to violations without giving further information.
"Since the announcement of the election timetable, we have witnessed violations in all governorates and not just against candidate supporters," she noted.
Three potential candidates have already submitted their candidacy papers to the National Elections Authority (NEA). These are Abdel-Fattah El-Sisi, Egypt's incumbent president whose term ends in April; Farid Zahran, head of the opposition Social Democratic Party; and Abdel-Sanad Yamama, head of the Wafd party, Egypt's oldest liberal party.
Others announced their intention to run in the elections, including Fouad Badrawi, a former MP and member of the Wafd Party's Higher Council; Hazem Omar, head of the People's Republican Party; Ahmed El-Fadaly, chairman of the Democratic Peace Party; and Ahmed Tantawi, a former MP and former head of the leftist Karama (Dignity) Party.
An initial list of candidates will be announced by the NEA on 16 October after disqualifying incomplete candidacy submissions.
Voting in Egypt will take place from 10-12 December. Egyptians abroad will cast their votes on 1-3 December.
The final result will be announced on 18 December if no run-off is required.
The upcoming elections are the fourth presidential elections since the uprising on 25 January 2011.
The most recent presidential elections were held in 2018.