Chaney came under scrutiny earlier this month after it came to light that he had been charged with domestic battery in 2009 after a fight with his then-girlfriend.
"I was waiting for my girlfriend to come home and I drank way too much while I was waiting and then I got into a verbal altercation about giving back my debit card," Chaney said in a radio interview with KBOI. "I ended up taking my cell phone out of her hand and in the process punched the wallI pretty much acted like a big jerk."
Chaney eventually pleaded guilty to misdemeanor charges of disturbing the peace and malicious injury to property.
He has also filed for bankruptcy twice in the last ten years.
After the reports of the past charges came out, Chaney said that he had become closer to God and his new family and had put his past behaviors behind him.
At a meeting last week with the Canyon County Republican Central Committee, Chaney reiterated that he had no plans to drop out of the race. He was the only Republican listed on the ballot for Seat 10B in Caldwell.
At the same meeting, Brian Bishop announced that he would run on the Republican ticket as a write-in candidate.
Wednesday, Chaney said in a press release that the backlash has become a distraction and has caused strain on his family.
"While who I am is not defined by the past, it is apparent that the focus of this race will continue to be on old events and not on the vision each candidate has for the future," Chaney said in the release.
"It would not be fair to allow this focus to serve as a distraction from the important issues facing the State as voters make their choices in November.
"Likewise, the strain on my family over the last couple weeks has been undeniable. I will continue to live my life as an example of renewal as I stay active in my community and my church.
"However, it is in the best interests of the District and my family that I reach this decision."
Chaney says he will return any remaining campaign funds to his contributors.
The Democratic candidate for the seat, Leif Skyving, has also filed for bankruptcy twice, and has been convicted of public drunkenness.