But the Conservative politician continued to deny he had used the word "pleb" as he returned to the backbenches and said he would concentrate in future on his job representing his constituents.
Sir George Young, former leader of the House of Commons, has been announced as Mr Mitchell's successor.
Labour said the resignation, after weeks of Mr Mitchell clinging to his role as the Government's Chief Whip, exposed David Cameron's weakness and revealed a Coalition Government increasingly out of touch with ordinary people.
Just hours earlier, George Osborne faced accusations that his aides had tried to persuade a train guard to allow him to remain in a first-class carriage despite having only a standard-class ticket.
Mr Mitchell was made Chief Whip, in charge of maintaining discipline among Government MPs, only at the start of September.
However, within a fortnight he was at the centre of a highly damaging political row after officers accused him of berating them as he attempted to leave pass through Downing Street's main gate on his bike. When asked to use a side route, he swore at them and called them
"plebs", the police officers noted in their official log books. Since then, Mr Mitchell has been under intense pressure over his position, which intensified earlier this week when Westminster returned after the party conference season.
The former International Development Secretary appeared to rise to jeers from Labour, and again denied he had said the words attributed to him. Even Tory MPs complained that his actions had only served to increase pressure on him to come clean over what he had said.
Within hours there was a stormy exchange at the Tories' powerful 1922 committee, during which a number of Tory MPs expressed concern about the prospect of Mr Mitchell remaining in his role.
Labour welcomed the resignation but warned the Conservatives were looking increasingly arrogant.
Michael Dugher, Labour's Shadow Cabinet Office Minister, said: "What people will want to know is why, when the entire country could see that what Andrew Mitchell did was wrong, the Prime Minister totally failed to act.
"David Cameron is left looking profoundly weak and totally out of touch, doing everything he could to hold on to Andrew Mitchell only for his Chief Whip to bow to the inevitable given the understandable public anger."
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