Maurice Smith, chief inspector of schools since January, has decided not to apply for the permanent position.
The former social worker, who was head of Ofsted's early-years division, will continue until a successor can be appointed to David Bell, who moved in January to take charge of the Department for Education and Skills.
Ofsted recently advertised the pound;150,000-a-year post and hopes to appoint a replacement to start in the autumn. Miriam Rosen, director of education, has also ruled herself out. Front-runners for the post are expected to include senior local authority figures. Ralph Tabberer, former head of the Training and Development Agency, who was expected to be a candidate, was recently appointed as director of schools at the DfES.
Mr Smith said: "I have every intention of devoting all my energies to leading Ofsted over the next few months, ensuring that the organisation is on track to deliver all that is expected when the new chief inspector takes up post."