Cortez Masto was considered a serious candidate for the job and was getting pushed by top Democrats like former Senate Democratic Leader Harry Reid, who had directly lobbied Biden about possibly picking his home state senator.
Cortez Masto said that while it was "an honor to be considered as a potential running mate," she had decided to withdraw her name from consideration.
"I support Joe Biden 100% and will work tirelessly to help get him elected this November," she said. "Nevada's economy is one of the hardest hit by the current crisis and I will continue to focus on getting Nevadans the support they need to get on back on their feet."
Masto directly informed the Biden search committee about her decision to pull her name from consideration before announcing it on Thursday, a source familiar with the senator's thinking told CNN.
The decision to withdraw her name was one the senator made with her husband, Paul Masto, the source said.
Reid, a longtime friend to both Cortez Masto and her family, was the senator's biggest proponent and had talked directly with Biden about picking the freshman Nevada senator as his running mate, an aide to Reid told CNN.
"I can't say enough about my admiration for Sen. Cortez Masto," Reid told CNN in a statement. "She is a truly gifted leader who always puts Nevada first, and I will continue supporting her however I can. Her leadership will be critical as Nevada and the country recovers from this public health and economic crisis."
Cortez Masto, a native Nevadan, began her public service career in 2006 when she successfully became the state's attorney general. In that role, the would-be senator was first introduced to the Biden family -- she worked with Beau Biden, the former vice president's late son who served as Delaware's attorney general.
"I've known Joe Biden for nearly 10 years, but he wasn't the first member of the Biden family I met. It was actually his late son, Beau, a fellow state attorney general, my partner in many important fights and a dear friend," Cortez Masto wrote in her first email on behalf of the Biden campaign this year. "As I got to know Joe personally, it was clear the apple had not fallen far from the tree."
Cortez Masto was elected to the Senate in 2016, filling the seat once held by Reid. She became Nevada's first female senator and the nation's first Latina senator.