Cardinal Keith O'Brien has resigned to contest claims of inappropriate behaviour.
Three priests and a former priest complained to the Vatican about inappropriate behaviour towards them going back 30 years, the Observer reported on Sunday.
Britain's most senior Catholic did not not attend Mass at St Mary's Cathedral in Edinburgh on Sunday following the allegations. He was due to celebrate eight years of Pope Benedict holding office.
The outspoken cardinal said in a statement "The Holy Father has now decided that my resignation will take effect today." He has denied all allegations of inappropriate behaviour and was due to retire when he turned 75 on March 17 next month.
The cleric, who came under the spotlight earlier this year after being named 'bigot of the year' by gay rights charity Stonewall, said he would not be joining the conclave to choose a successor to Pope Benedict XVI, adding: "I do not wish media attention in Rome to be focussed on me - but rather on Pope Benedict XVI and on his successor."
The Cardinal was the only British Roman Catholic cleric able to vote in the upcoming conclave to elect a successor to Pope Benedict XVI following his earlier decision to resign.
In a statement issued by the Scottish Catholic Church, he continued: "I have valued the opportunity of serving the people of Scotland and overseas in various ways since becoming a priest.
"Looking back over my years of ministry: For any good I have been able to do, I thank God. For any failures, I apologise to all whom I have offended."
Cardinal O'Brien was voted by 10,000 supporters to receive the Stonewall 'bigot of the year award' in November after calling off talks with the Scottish government over same-sex marriage earlier that year, comparing the reform to the re-introduction of slavery and describing it a "grotesque subversion of a universally accepted human right."
He has also compared gay marriage with paedophila, saying: "What if a man likes little girls? Can he adopt a little girl and then just have a little girl at home? We are working towards the destruction of any sort of moral standards."
However O'Brien said he would be happy for weddings to be made available to priests earlier this month.
Speaking to the BBC ahead of trip to Rome where he was to help elect the next pope, after the resignation of Benedict XVI, he said: "I'd be very happy if others had the opportunity of considering whether or not they could or should be married.
"It's a free world and I realise that many priests have found it very difficult to cope with celibacy as they lived out their priesthood, and felt the need of a companion, of a woman, to whom they could get married and raise a family of their own."
The Rev Sharon Ferguson, chief executive of the Lesbian and Gay Christian Movement, said Cardinal O'Brien's resignation was a "positive thing".
"He has been a very vocal opponent of lesbian and gay equality and we can only pray that whoever takes over his position will be a little bit more thoughtful in the way they choose to conduct themselves towards lesbian and gay people and lesbian and gay Catholics in particular," he said.
"He has hurt a lot of people and excluded a lot of people from God's love with what he has done."
An apostolic administrator will be appointed to govern the Archdiocese of Saint Andrews and Edinburgh until a successor to Cardinal O'Brien is appointed.
The Cardinal, who was born in Ballycastle, Co Antrim, has been the Archbishop of St Andrews and Edinburgh since 1985.
Ordained as a priest in 1965, he was proclaimed a cardinal by Pope John Paul II in October 2003.
Cardinal O'Brien said on Monday: "I thank Pope Benedict XVI for his kindness and courtesy to me and, on my own behalf and on behalf of the people of Scotland, I wish him a long and happy retirement. I also ask God's blessing on my brother Cardinals who will soon gather in Rome to elect his successor."
While he will not be joining them, he added: "I will pray with them and for them that, enlightened by the Holy Spirit, they will make the correct choice for the future good of the Church.
"May God who has blessed me so often in my ministry continue to bless and help me in the years which remain for me on Earth and may he shower his blessings on all the peoples of Scotland, especially those I was privileged to serve in a special way in the Archdiocese of Saint Andrews and Edinburgh."
Scotland's first minister, Alex Salmond, spoke of his sadness at the resignation of Cardinal Keith O'Brien, whom he described as a "good man for his church and country".