The 27-year-old, one of only two National Front lawmakers in the outgoing parliament and a popular figures among the party faithful, said in a letter to the Le Dauphine Libere newspaper that she would be leaving political life for a while for personal and political reasons.
Marine Le Pen's defeat in Sunday's presidential election against centrist Emmanuel Macron has triggered a rare public display of disagreement at the top of the far-right party.
"You know my story, you know I've been in this political world all my life. At 27 (year old) it is time for me to leave it for some time," Marechal-Le Pen was quoted as saying in the paper.
"I am not giving up for ever on this political battle," she added.
Marechal-Le Pen, whom some in the party hope will eventually take over from her aunt, is seen as more conservative on social and economic issues.
Soon after the election defeat, Marechal-Le Pen said Le Pen's toning down of her stance on seeking an exit from the euro currency had come too late, and failed to convince voters who worried about that part of her program.
Marechal-Le Pen also took part in the "Manif pour tous" (Protest for all) rallies against gay marriage laws introduced in 2013 - a movement which Le Pen, who has striven to extend her party's appeal to a wider base, avoided.
Other differences between the two include their relationship with the party founder and funder of this year's presidential campaign, Jean-Marie Le Pen. While Marine is estranged from him, Marion has closer ties.
"This will create a huge disappointment.... Marion represented a hope for the future for many FN voters and activists," Jean-Marie Le Pen told Le Figaro, calling his grand-daughter's move "a desertion."
Le Pen's defeat has raised questions about her leadership and she may not run for parliament in her northern fiefdom of Henin-Beaumont, where she narrowly lost in 2012.
"It's under discussion. She has the choice between this political battle or leading the new National Front in the legislative elections," Gilbert Collard, the party's second outgoing lawmaker, told reporters.
"It's a tactical choice and not an existential one that we will debate."
After losing to Macron on Sunday, Le Pen said she wanted to transform the party, while other party officials said an alternative name was being considered.