The suspension by the former US Marine and oysterman, announced in a video on social media, is likely to complicate Democrats' efforts in November elections to win control of the Senate, where Republicans hold a 53-47 majority.
In the video, Platner repeated his denial of the sexual assault accusation and said the effort to remove him from the ballot was fuelled by his effectiveness in taking on the political establishment.
"For the movement to continue, it can't be me, and for that reason we are suspending campaign operations," Platner said.
"This is incredibly difficult, because I know that some will think it's an admission of guilt, and it most certainly is not."
Platner has until July 13 to formally withdraw from the race, and the state party would have until July 27 to select another nominee to challenge senator Susan Collins, a moderate Republican who has held the seat since 1997.
Shortly before Platner posted his video, the Maine Democratic Party confirmed it would hold a nominating convention should he drop out.
Several potential replacement candidates are already drawing attention, although actor Patrick Dempsey said he would not seek the nomination.
Dempsey, best known as Dr Derek "McDreamy" Shepherd on the television show Grey's Anatomy, wrote in a Maine newspaper that he had considered seeking the job, but opted against it because "I believe I can contribute more effectively through the life I've already built".
Many Democrats had already questioned Platner's fitness for office before Politico reported on Monday that a woman accused him of forcing her to have sex with him nearly five years ago.
CNN followed with a report that the woman accused him of entering her home without permission and raping her while he was intoxicated.
Platner flatly denied the allegations.
On Tuesday, the Washington Post reported that a former girlfriend of Platner's said he repeatedly removed condoms during sex without her consent, an allegation that Platner's campaign called "categorically false and politically motivated".
Democratic leaders and senator Bernie Sanders had called on Platner to withdraw from the race.
Platner had enjoyed a rapid political rise by by promoting progressive causes such as universal health care while criticising billionaires and concentrated wealth.
He has faced a series of other controversies, including offensive Reddit posts he apologised for and a now-covered tattoo that resembled a Nazi symbol.
The Wall Street Journal reported that Platner's wife, Amy Gertner, had told the campaign her husband sent sexually explicit texts to several women early in their marriage.
Platner has acknowledged past poor behaviour and asked for forgiveness, saying he struggled with alcohol abuse and mental health issues after military deployments in Iraq and Afghanistan.
1800 RESPECT (1800 737 732)
National Sexual Abuse and Redress Support Service 1800 211 028
