The 27-year-old has been long considered a rising star of the Front National party with support of Southern traditional conservative voters who shy away from the views of her aunt.
And she was pegged to take over to lead the party into victory in France’s next election.
But she had previously indicated she never intended to stay in politics throughout her career.
And today she was quoted by Le Parisien as saying she had made a “personal choice” to quit the political scene.
The French newspaper said she had already informed Marine Le Pen, who was decisively defeated by centrist former banker Emmanuel Macron in Sunday’s election.
Ms Le Pen said: ”I respect her choice. I know how demanding political life can be.”
The two Le Pens previously clashed in the press during the election campaign, with the party leader telling French media her niece would not get a place in her cabinet.
Last month Marine Le Pen said: “My niece is an MP. I don’t owe her anything.
“I don’t owe anyone anything. I have no favours to return.”
And the senior Le Pen went on to criticise Marion’s demeanour, claiming she was “rather stiff”.
It is unknown how long Marion will stay away from political life, as she is currently ranked as one of the most influential MPs in the country.
She is also the youngest member of the National Assembly ever elected, taking on the role at just 22.
Her reported exit comes as Marine Le Pen vowed to become the main opposition party in France, following Mr Macron’s win with more than 65 per cent of the vote.