WASHINGTON — Dina Powell has withdrawn from consideration as the next U.S. ambassador to the United Nations, according to people familiar with the matter.

President Donald Trump had said that Powell, a Goldman Sachs Group Inc.  GS, -0.89%  executive, was on his short list to replace Nikki Haley, who announced her resignation this week. Powell, who was a deputy national security adviser during the first year of Trump’s administration, told Trump about her decision during a phone conversation on Thursday, one of the people said.

Powell remains close to the Trump family, including the president’s daughter, Ivanka Trump, and her husband, Jared Kushner, according to people familiar with the matter. But she was viewed more skeptically by John Kelly, the White House chief of staff.

Powell worked at Goldman from 2007 to 2017, overseeing the bank’s philanthropy efforts. She joined its investment banking arm earlier this year with the goal of using her foreign connections to drum up business with sovereign-wealth funds and other global investors. She is especially close to Saudi Arabia’s Public Investment Fund and the country’s ruling family, ties that could have complicated her bid to become the U.N. ambassador. She gained a seat on Goldman’s powerful management committee, rankling some longtime executives.

An expanded version of this report appears on WSJ.com.

Also popular on WSJ.com:

Big lenders make push to liquidate Sears.

Your rock-solid case for flying business class for work.