Senator Joe Manchin III, the conservative West Virginia Democrat known for bipartisan deal-making and also for frustrating some of his party’s most ambitious policy goals, announced on Thursday that he would not seek re-election, dealing a blow to Democrats’ chances of holding the Senate next year.

Instead, Mr. Manchin, who was likely to face a strong Republican challenger to keep his Senate seat in a deeply red state, said he would continue exploring whether there was an appetite in the country for a centrist third-party bid for the presidency. That prospect has alarmed many Democrats, who fear such a run could doom President Biden’s hopes of remaining in the White House.

“After months of deliberation and long conversations with my family, I believe in my heart of hearts that I have accomplished what I set out to do for West Virginia,” Mr. Manchin, 76, said in a video news release. “I have made one of the toughest decisions of my life and decided that I will not be running for re-election to the United States Senate, but what I will be doing is traveling the country and speaking out to see if there is an interest in creating a movement to mobilize the middle and bring Americans together.”

The decision was an immediate setback for Democrats’ hopes of holding a majority in the Senate, where they currently control 51 votes — 48 Democrats and three independents who caucus with them. Mr. Manchin, who served six years as governor before his election to the Senate in 2010, was seen as the only Democrat with a chance of holding the seat.

A recent poll showed Gov. Jim Justice of West Virginia, a Republican, as the front-runner in the race.

Behind closed doors, Senator Chuck Schumer, Democrat of New York and the majority leader, had been relentlessly encouraging Mr. Manchin to run again. At the same time, Democrats have been hoping that he would not pursue a presidential bid through the centrist political group No Labels, which they worry would draw votes from Mr. Biden and help elect a Republican.

No Labels said the organization would decide whether to go forward with a presidential ticket in early 2024 and commended Mr. Manchin for “stepping up to lead a long overdue national conversation about solving America’s biggest challenges, including inflation, an insecure border, out-of-control debt and growing threats from abroad.”

In a statement on Thursday evening, the president praised Mr. Manchin’s record in a political career of “more than 40 years” and said he looked “forward to continuing our work together to get things done for the American people.”

Mr. Manchin was considered the Senate Democrat most in danger of losing his seat as the party navigates a difficult electoral map for 2024, and he had been publicly weighing his political future for months, prompting intense speculation.

“I know our country isn’t as divided as Washington wants us to believe,” Mr. Manchin said in his statement. “We share common values of family, freedom, democracy, dignity and a belief that together we can overcome any challenge. We need to take back America and not let this divisive hatred further pull us apart.”

Former President Donald J. Trump carried West Virginia by about 39 percentage points in 2020. Two other Democratic senators facing headwinds have announced they are seeking re-election: Senator Jon Tester of Montana (where Mr. Trump won by 16 percentage points) and Senator Sherrod Brown of Ohio (where Mr. Trump won by 8 percentage points).

Republicans immediately began claiming victory.

“We like our odds in West Virginia,” Senator Steve Daines, Republican of Montana and the chairman of the National Republican Senatorial Committee, crowed in a statement.

David Bergstein, a spokesman for the Democratic Senatorial Campaign Committee, argued that his party remained in a strong position to hold the chamber, suggesting its candidates could pick off some Republican-held seats.

“Democrats have multiple pathways to protect and strengthen our Senate majority and are in a strong position to achieve this goal,” Mr. Bergstein said. “In addition to defending our battle-tested incumbents, we’ve already expanded the battleground map to Texas and Florida, where formidable Democratic candidates are out-raising unpopular Republican incumbents.”

Given his status as a Democrat from a deeply Republican state, Mr. Manchin was a constant source of attention on Capitol Hill. He repeatedly frustrated his fellow Democrats by breaking with them on progressive legislation, dooming some of their top priorities. In recent years, he has enjoyed virtual veto power on his party’s agenda, given Democrats’ need to stay united in the face of Republican opposition in the nearly equally divided Senate.

Progressive groups noted a long list of grievances with the West Virginia Democrat.

“Joe Manchin watered down the Democratic economic agenda, made the cost of raising children higher and billionaire taxes lower, and now doesn’t even run for re-election,” said Adam Green, a founder of the Progressive Change Campaign Committee. “History, and West Virginians who are struggling, will not judge Joe Manchin well.”

But with his power to make or break legislation, Mr. Manchin was also known for helping broker deals that resulted in some of the most significant new laws during Mr. Biden’s presidency, often by partnering with mainstream Republicans including Senator Susan Collins of Maine.

Those achievements included passage of the biggest investment in clean energy in U.S. history, the largest financing of bridges since the construction of the interstate highway system, the first bipartisan gun safety legislation in a generation, a huge microchip production and scientific research bill to bolster American competitiveness with China, a major veterans health care measure, and an overhaul of the electoral system designed to prevent another Jan. 6-style attempt to overturn a presidential election.

Mr. Manchin played a central role in shaping Mr. Biden’s efforts to fight climate change.

With personal financial ties to the coal industry, Mr. Manchin never made any secret of his distaste for policies to curtail fossil fuels: West Virginia is second in coal production and seventh in natural gas production among the states, and he was the Senate’s top recipient of campaign donations from the oil and gas industry.

As chairman of the powerful Senate Energy Committee, Mr. Manchin forced the president to sharply scale down an ambitious climate and social spending agenda. Yet, he ultimately cast the crucial vote to ensure that the more modest legislation was enacted into law.

Mr. Manchin was sworn in as a senator in 2010, after winning a special election to serve out the remainder of the term of Senator Robert C. Byrd, the long-serving pillar of the Senate, who had died at the age of 92. He won his first full term easily in 2012, but publicly weighed retirement in 2018, complaining that there was no room in the Senate for centrists like him; “this place sucks,” he told colleagues then.

He opted to stay on, but in the years since has made no secret of his dismay about the hyperpartisan nature of Congress, and has openly flirted with leaving the Democratic Party.

His houseboat, named Almost Heaven, served as a bipartisan hangout for senators.

“He’s a good senator, willing to work in a bipartisan way,” Senator Charles E. Grassley, Republican of Iowa, told reporters at the Capitol. “And we need more people that will promote bipartisanship and not follow the party line.”

Coral Davenport and Reid J. Epstein contributed reporting.