On Wednesday, officials said the museum would continue to make repairs to the ship and launch a fund-raising effort for the vessel's preservation.
Asked what prompted the change, museum spokeswoman Hope Koseff Corse said that under new leadership the institution has been looking for ideas for new interpretations and exhibits.
"The Olympia fits in extremely well with the stories we are telling and plan to tell with new exhibits," Corse said.
Jesse Lebovics, the museum's director of historic ships, said that while the search for a new home was being conducted, the Olympia was a significant contributor to revenue and visitors at the museum.
"The last few years have proved that it is absolutely vital that the Olympia becomes integral to the museum," Lebovics said.
He described the ship, 344 feet long, as "absolutely unique in the world. . . . It is the only surviving veteran of the Spanish-American War. It's a unique time capsule to the late 1800s."
The Olympia, which was Cmdr. George Dewey's flagship at the Battle of Manila and on which he famously said, "You may fire when you are ready, Gridley," is one of two historic ships at the museum. The other is the Becuna, a World War II-era submarine decommissioned in 1969.
Officials said six organizations around the country submitted transfer applications for the Olympia. They said only two, in California and in South Carolina, were asked to provide detailed plans for the ship's preservation.
A panel found neither organization had viable long-term plans for the vessel, officials said.
Lebovics said a $7 million fund-raising effort is being launched for repair work to the ship, especially its hull, which he said has become thin in some places and developed leaks.
Lebovics said the process of searching for a new home for the Olympia showed there is much interest in the vessel.
"The transfer process we've been working on has shown us there is national interest in the ship," Lebovics said. "People want to come here and see it, and people want to give money to help save it."