WASHINGTON (Reuters) - General John Allen, who oversaw the NATO war effort in Afghanistan until earlier this month, has decided to retire instead of pursuing his nomination as the next NATO supreme allied commander due to family health issues, President Barack Obama said on Tuesday.

Allen, whose wife has suffered from chronic health problems, has been under pressure in recent months as the target of a high-profile Pentagon investigation that in January cleared him of wrongdoing after examining email exchanges with a Florida socialite.

The investigation arose from the sex scandal that forced retired General David Petraeus to resign as CIA director in November. The White House had publicly said it would move forward with Allen's nomination for the NATO job.

Obama's brief statement on Allen Tuesday made no mention of the investigation. Obama praised the general's performance in Afghanistan, where he oversaw the start of the withdrawal from America's longest war and rapid expansion of Afghan forces who are increasingly bearing the brunt of the conflict.

"John Allen is one of America's finest military leaders, a true patriot, and a man I have come to respect greatly," Obama said after meeting the general earlier in the day.

Allen requested retirement at the meeting and Obama accepted, the president said.

"I wish him and his family the very best as they begin this new chapter, and we will carry forward the extraordinary work that General Allen led in Afghanistan," Obama said.

Allen, in an interview with the Washington Post, said he wanted to focus on helping his wife cope with chronic health issues that include an autoimmune disorder.

"For a long time, I told her, ‘When you can't bear this anymore, just tell me and I'll drop my (resignation) letter right away,'" Allen was quoted as saying by the Post.

The Post said Allen, who has two daughters, no longer wanted to place the pressure for that decision on his wife. "Now I need to be the one who takes this out of her hands," he said.

Allen came under investigation because of his friendship with and emails to Jill Kelley, a Tampa, Florida, resident he knew when he served as the No. 2 officer at the U.S. military's Tampa-based Central Command from July 2008 to June 2011. Kelley's name surfaced in the Petraeus scandal because of emails sent to her by Paula Broadwell, who wrote a book about Petraeus and had an affair with him.

(Reporting by Steve Holland, Matt Spetalnick and Phil Stewart; Editing by Will Dunham and Bill Trott)