President Ronald Reagan, announcing the seller would instead donate the item to the late president's foundation.
PFCAuctions.com, based in the Channel Islands between England and France, had been promoting the auction this week, with bidding reaching about $30,000 before it was suspended.
The auction had drawn outrage from the Reagan's family and foundation.
"Whatever's in the vial - could be mouse blood - it's certainly not Reagan blood," son Michael Reagan said in a telephone call with the Associated Press earlier this week. "And what an outrageous thing to do to (Reagan's widow) Nancy and the family. I hope the world calls on this organization to cease and desist because it's so bogus."
"Even if it were true, how dare they, how dare they do such a thing?"
The Reagan Presidential Foundation executive director John Heubusch described the auction as a "craven act."
The auction house said the 5-inch glass vial contains dried blood residue from Reagan from a sample taken at the time of the assassination attempt on the president in 1981.
The lab purportedly was contracted for bloodwork by George Washington University Hospital and the Walter Reed Medical Center after the shooting. The woman, who died in 2010, purportedly kept the vial, and her son is now trying to sell it.
PFC Auction said the seller bought the vial at a public auction in February for $3,550 and that it negotiated with the seller to withdraw the item and donate it to the foundation, “a considerable financial gesture.”
"We are very pleased with this outcome and wish to thank the consignor and PFC Auctions for their assistance in this matter. While we contend that the removal of the vial from the hospital laboratory and the U.S. auction sale in February 2012 were not legal acts in our opinion, we are grateful to the current custodian of the vial for this generous donation to the Foundation, ensuring President Reagan's blood remains out of public hands," Heubusch said in a statement.