Carlos Arthur Nuzman has sent his resignation letter as head of the Brazilian Olympic Committee (BOC) from a prison.
He's been held there since last week amid an investigation into a vote-buying scheme to bring the 2016 Olympics to Rio de Janeiro.
The national Olympic committee on Wednesday designated vice president Paulo Wanderley to replace Nuzman, who had headed the BOC for 22 years.
Wanderley, who described his predecessor's resignation as "a relief", will serve the three years remaining on Nuzman's term.
"The resignation of the president, on a personal level, I think will speed up resolving our problems," Wanderley said.
Nuzman, who also headed last year's Rio Olympics, had already been suspended as a member by the International Olympic Committee.
Nuzman's arrest has further tarnished last year's games, which were plagued by reports of endemic corruption.
Brazil officially spent $13 billion to put on the games. A year after, the organising committee still owes creditors between $30-40 million.
Wanderley said "all of us were taken by surprise" by Nuzman's arrest and allegations he helped channel at least $2 million to Lamine Diack, a former IOC member from Senegal.
Brazilian and French investigators also said Nuzman had 16 kilos of gold - worth about $750,000 - stored in a depository.
Wanderley's main job is to convince the IOC to lift Brazil's suspension, which cuts of some its funding.
