Bolivia’s interim president, Janine Agnes, has canceled the October 18 presidential election.
She said she did not want to split the vote and see former President Evo Morales return to the Socialist Party’s office.
Candidate for Mass Luis Arce is the leader in opinion polls, and Ms Áñez lags behind in fourth place.
Ms Áñez was sworn in last year after Mr Morales resigned and left the country amid allegations of electoral fraud.
Mr Morales, who currently lives in Argentina, later said he had been forced into exile by police and the military.
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Mr Morales served as President of Bolivia for almost 14 years, from 2006 to 2019, after winning three consecutive elections.
How did Janine Anges explain her decision?
In a video message, Ms Áñez said: “Today, I put aside my candidacy for president of Bolivia because of democracy.”
She said she had decided to drop out because of “the risk of the vote being split between several candidates and that as a result of this split, Mas will eventually win”.
“If we do not unite, Morales will return. If we do not unite, democracy loses,” Ms Áñez added, without saying which candidate she would support now.
A poll published earlier this week suggests that Luis Arce may win the election in the first round.
Ms Áñez’s leadership has been controversial from the outset, according to the BBC’s South America correspondent Katie Watson.
Supporters of Mr Morales say she took over the presidency after he was ousted in a coup – and he is the legitimate leader.