"I will not be a candidate for presidency of the republic," Sahagun said in an announcement at the presidential residence of Los Pinos.
When Fox's term ends on Dec. 1, 2006, "We will go home together," she added.
Sahagun has been compared to a conservative Hillary Clinton, both for her ambitions and for the criticism focused upon her. She had long toyed openly with the idea of a presidential run.
Critics complained she was unfairly using her position as first lady as a presidential springboard — a sensitive issue in Mexico, which is trying to escape from a legacy of presidents choosing their successors and where the constitution bars presidential re-election.
The private charitable foundation she heads, Vamos Mexico, also has been accused of spending too much on administration, of receiving improper favors from the government and of serving as a vehicle to promote Sahagun.
Yet most polls have shown that she is the most popular possible presidential contender within Fox's National Action Party, trailing only Mexico City's opposition party Mayor Andres Manuel Lopez Obrador in overall preference.
Monday's declaration seems to have been prompted by fierce criticism in a July 5 resignation letter by Fox's chief of staff, Alfonso Durazo.
"The country has certainly advanced politically, enough that it is ready for a woman to reach the presidency of the republic," Durazo said. "Nonetheless, it is not prepared to have the president leave the presidency to his wife."
Sahagun echoed those words during her brief statement on Monday.
"Mexico is ready to be governed by a woman," she said, even as she ruled herself out.
She also insisted that "I have never intervened nor will I intervene" in her husband's affairs.
Apparently responding to Durazo's complaints, Fox said last week that his wife had no plans for the presidency and that the two would retire to their ranch. "We're going horseback riding on Dec. 1 or Dec. 2 of 2006. We invite you to come and take photos," he said.
Sahagun, however, had postponed a formal declaration, keeping the controversy alive.
In spite of Fox's statement, "Everybody knows that the one who decides is the wife and not he," analyst Jose Antonio Crespo wrote in the newspaper El Universal on Monday. "Marta has managed to devalue the word and image of the president to a dangerous degree."
In a speech last week to a conference of women in Paraguay, Sahagun criticized "retrograde, misogynist and machismo attitudes that hold back respect for our most elementary rights as citizens" and said that women cannot be patient in waiting for progress.
Asked about the issue after leaving a Sunday Mass in Fox's hometown of San Cristobal, she replied, "We'll see, boys, we'll see."
Sahagun was a housewife raising a family in the central Mexican town of Celaya when she grew interested in politics, made an unsuccessful run for mayor and went to work for Fox when he was governor of Guanajuato state.
In 1998, she left her first husband Manuel Bribiesca.
Sahagun became press secretary for Fox's campaign, then for his presidential administration. In July 2001, they married — shocking some Mexicans because both are deeply religious yet divorced.
The marriage also caused friction within Fox's family, where his adopted daughters had clearly yearned for their father and mother to reunite.