Dr Jennifer Foster, who has served Drymen in Stirlingshire for 20 years, had previously indicated she would cut her opening hours after the ruling by an NHS Forth Valley committee to let a community pharmacy open in the village. The practice will no longer be able to dispense medicines and will lose income.
However, Dr Foster, who led a community campaign against the application, has now told the health board that she is to resign from her role after deciding she cannot continue.
It is the latest development in a growing national row over the role of dispensing GP surgeries in rural locations. Doctors can no longer dispense medicines if a pharmacy opens in their community and many say they rely on the income to run services.
In Millport on Great Cumbrae island off the Ayrshire coast, Jim and Elizabeth Bryson quit more than a year ago after a pharmacy opened, leaving the health board to pick up a £50,000-a-month bill for locums. A permanent replacement has still not been found.
A pharmacy has also recently been given permission to open in Aberfoyle, a 20-minute drive from Drymen, despite strong local opposition. The GP practice there has launched an appeal.
Fraser Robb, chair of Drymen Community Council, said news of Dr Foster's resignation was greeted with dismay. He feared the situation could turn into "another Millport".
"She's very popular, is fantastic with patients and is extremely caring," he added. "We don't blame her: it was a shocking decision to allow the application.
"This is happening all over the country. In Millport they're shipping locums in.
"One day we'll be seeing Joe Smith and the next day it'll be Jimmy Jones, and they won't know the history of the patients. We've only had four or five doctors in the last 100-odd years, now we'll have one every 10 minutes. This could rip the heart out of the community."
The Scottish Government has launched a consultation on the role of dispensing GP practices, with a report due to be published soon. Mr Robb believes new applications should have been frozen until rule changes are announced.
He added: "It's shocking that they're supposed to be having a revamp yet are still making decisions while they're in the process of looking into it. [Health Secretary] Alex Neil is supposed to be a sensible MSP but he's one useless so-and-so."
The SNP MSP for Stirling, Bruce Crawford. said after hearing of the resignation he would contact NHS Forth Valley immediately. It is understood Dr Foster will leave on July 31. Other staff have been told they will work directly for the health board in future.
Dr Foster had been getting some locum support since a GP colleague quit, also citing the pharmacy application as the reason.
Drymen Potions Ltd, which successfully applied for the pharmacy licence in February, has since been taken over by Davidsons Chemists. Its managing director, Allan Gordon, said the new pharmacy was on course to open by August 1 - the day after Dr Foster is due to leave her post.
"I was aware she was in discussions with the health board. Whether she resigns, I have no control over," Mr Gordon said. "It's quite clear that people in Drymen and surrounding areas are in need of a GP service."
A spokeswoman for NHS Forth Valley said several options were being considered for future provision of primary care services in Drymen and that the practice building was already owned by the health board.
She added: "Once a way forward has been agreed we will inform patients of the proposed future arrangements. In the meantime, Dr Foster will continue to provide GP services in the Drymen area until alternative arrangements have been agreed. We would also like to take this opportunity to thank Dr Foster for the contribution she has made to local healthcare over many years."