NEW YORK (CNNMoney) — After months of contentious public debate, Larry Summers has withdrawn his name from consideration to become the next chairman of the Federal Reserve, sources familiar with the decision confirmed to CNN.
President Obama said he spoke with Summers earlier Sunday and accepted his decision.
"Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today," the president said in a statement. "I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future."
Current Fed Chairman Ben Bernanke's term is set to end in January, and before the new appointment can be made official, the Senate is tasked with holding confirmation hearings and voting on the nomination.
While the former Treasury Secretary is no stranger to high-profile roles and has a close relationship with Obama, forged in the depths of the financial crisis, he would have been a controversial pick largely due to his lack of monetary policy experience in comparison to his top contender, Janet Yellen, who currently serves as vice chair at the Fed.
According to CNNMoney surveys, Yellen is by far the preferred candidate among economists due to her years of Fed experience. If appointed, she would be the first woman to lead the organization in its 100-year history.
If Obama had picked Summers, one of his economic mentors, the confirmation hearings could proved dicey.
In July, a group of Democratic Senators sent a letter to Obama urging him to choose Yellen.
"Our nation badly needs a Chairman with a solid record as a bank regulator," the letter said.
-- CNN's Dana Bash, Jim Acosta and Gloria Borger contributed reporting.