White House counsel Harriet Miers has submitted her resignation, Washington has said.
Ms Miers been a trusted and loyal adviser to Mr Bush
White House spokesman Tony Snow said President George W Bush reluctantly accepted her resignation, which takes effect on 31 January.
Mr Snow said a search for a successor was under way.
Mr Bush nominated Ms Miers in October 2005 to the Supreme Court, but she had to drop out after lawmakers questioned her qualifications.
Asked why she was quitting her job, Mr Snow said that "basically, she has been here six years".
"As somebody said earlier today 'She put 12 years of service into six years,'" Mr Snow said.
Ms Miers - who has no judicial experience - was nominated by President Bush to the Supreme Court to replace retiring Justice Sandra Day O'Connor.
But she was forced to withdraw as a nominee after coming in for criticism from both Democrats and Republicans.
She was reprimanded by Senators for giving "incomplete to insulting" answers to written questions.
In a letter confirming her decision to withdraw from the nomination process, Ms Miers wrote that continuing to seek Senate approval would prove to be a burden on the White House.
The withdrawal of Ms Miers was seen as a significant blow President Bush at the time.
Ms Miers has been a trusted and loyal adviser to Mr Bush since the 1980s.
The two met in Texas, where she was his personal lawyer, then served on his gubernatorial campaign in 1994 and again during his presidential election of 2000.
Officially described as deputy chief of staff for policy, Ms Miers has been serving as President Bush's top legal counsel since November 2004.
At the time of her appointment, Mr Bush said he relied on her for "straightforward advice".