The BBC's director-general resigned Saturday evening after a Newsnight report which wrongly implicated Tory peer Lord McAlpine in a child abuse scandal, Xinhua reported.
"I have decided that the honourable thing to do is to step down," said George Entwistle in a statement outside New Broadcasting House in London.
Entwistle made an announcement at 9 p.m.. He said that when he was appointed to the role, he was confident BBC trustees had chosen the best candidate for the post and the right person to tackle the challenges and opportunities ahead.
"However the wholly exceptional events of the past few weeks have led me to conclude that the BBC should appoint a new leader," he said.
In an earlier report, an ex-Tory politician was accused of sex abuse by a victim Steve Messham, who was shown a photo in the 1990s which led to his accusation, but found out on Friday that he was accusing the wrong person.
Although not naming Lord McAlpine, the program falsely hinted that the former Tory treasurer of the Margaret Thatcher era was the offender.
Entwistle offered his apology after the scandal, saying that the program should not have been broadcast. But he was under fire for knowing nothing about the Newsnight report in advance.
This is the second time when Entwistle was caught in the mire recently, after UK was shocked by the child abuse scandal by former TV presenter Jimmy Savile. He was then ridiculed for his ignorance.