JOIN USStrauss-Kahn is locked up in a New York prison since Saturday when he was bundled out of a Paris-bound flight and taken into custody on charges of sexually assaulting a chambermaid at a Manhattan hotel.
"Dominique Strauss-Kahn has today informed the Executive Board of the International Monetary Fund (IMF) of his intention to resign as Managing Director with immediate effect," the IMF said in a statement after it received a formal letter in this regard from Strauss-Kahn.
In his letter Strauss-Kahn maintained his innocence and said he would fight off the charges.
"It is with infinite sadness that I feel compelled today to present to the Executive Board my resignation from my post of Managing Director of the IMF," he wrote.
The IMF said John Lipsky, the First Deputy Director, remains the acting MD of the agency.
"I think at this time first of my wife — whom I love more than anything — of my children, of my family, of my friends. I think also of my colleagues at the Fund, together we have accomplished such great things over the last three years and more," the former MD wrote in his resignation letter to the IMF Executive Board.
"To all, I want to say that I deny with the greatest possible firmness all of the allegations that have been made against me.
"I want to protect this institution which I have served with honour and devotion, and especially—especially—I want to devote all my strength, all my time, and all my energy to proving my innocence," he said.
Strauss-Kahn was earlier denied bail by a New York court in the case and is scheduled to attend another court hearing to seek release on bail.
The IMF said in a statement that it will communicate in the near future on the Executive Board's process of selecting a new Managing Director.
Strauss-Kahn, 62, has been charged with a criminal sex act, attempted rape and unlawful imprisonment.
He allegedly forced the 32-year-old maid, who is a native of Guinea, to perform oral sex and submit to anal sex.
Strauss-Kahn was taken into custody a few minutes before his Air France flight departed for Paris, on Saturday.
His lawyers have said that the sex was consensual.
On Wednesday, the accuser testified against Strauss-Kahn that "there was nothing consensual" about the assault that allegedly took place in a Manhattan hotel room.
Strauss-Kahn, a socialist politician, was seen as a possible contender in the 2012 elections, who could oust French President Nicholas Sarkozy from power.