German FA (DFB) President Wolfgang Niersbach announced his resignation following a meeting of the association's board at its Frankfurt headquarters on Monday.
The resignation comes amid a controversy over a 2005 payment of 6.7 million euros ($7.2 million) made to FIFA, football's world governing body, linked to the 2006 World Cup.
"I have recognized the time has come to take the political responsibility for events around the 2006 World Cup," Niersbach told reporters following the board meeting.
He noted that the board had not withdrawn its support for him and that it was his decision to step down so that the office of the DFB president would not be tarnished.
Niersbach stressed that he had "absolutely no knowledge of the background to the cash flow" under investigation. He said he believed he was beyond reproach in the affair despite taking the "political responsibility" for it.
"It is all the more depressing and painful for me to be confronted with transactions in which I was not involved and for which many questions also remain open for me," he said. He did not take any questions from reporters.
The DFB's two vice presidents, Reinhard Rauball and Rainer Koch, are to take over the president's duties on an interim basis.
Despite his resignation as DFB president, Niersbach is to retain his posts on the Executive Committees of both FIFA and the European governing body, UEFA.
In his statement, Koch said that Freshfields Bruckhaus Deringer, the law firm hired by the DFB to look into the affair, had identified out a number of points that need further clarification.
"They give us cause to say that we'll have to look very closely into the circumstances of how the 2006 World Cup was awarded," Koch said without giving any details.
Controversial 2005 payment
The 2005 funds were paid to reimburse - through FIFA - the late former Adidas CEO, Robert Louis-Dreyfus, who had loaned the 2006 World Cup organizing committee a similar amount a few years earlier.
The newsmagazine "Spiegel" has alleged that the funds were used to sway the 2000 FIFA vote on who should host the 2006 World Cup - in Germany's favor.
Niersbach has said these funds were paid to FIFA in 2002 to unlock subsidies to help organize the 2006 tournament. He has also denied that any votes were bought.
Niersbach's resignation comes almost a week after police raided the DFB's headquarters and his private residence as part of a tax-evasion investigation.
The private homes of his predecessor, Theo Zwanziger, as well as former DFB General Secretary Horst R. Schmidt were also searched.
All three have been named as suspects in the investigation by Frankfurt's prosecutors' office.
The prosecutors' office said the investigation was based on "suspicion of tax evasion in a particularly severe case" related to the 2005 payment.
pfd/kms (dpa, SID)