US lawmakers have urged the president to nominate a replacement for Attorney General Alberto Gonzales who can restore faith in the US justice system.
Democrat Patrick Leahy, who led an inquiry into Mr Gonzales' sacking of eight US attorneys, said the department was "corrupted by political influence".
Republican John Sununu said "a credible and effective" candidate was needed.
Defending Mr Gonzales, President George W Bush said "his good name was dragged through the mud for political reasons".
Mr Gonzales played a critical role in the war on terror and "worked tirelessly to keep this country safe," Mr Bush said.
In a brief news conference on Monday Mr Gonzales said he had tendered his resignation, which would take effect on 17 September.
Mr Gonzales, the nation's top law-enforcement officer, had faced numerous calls to quit over the sacking of federal prosecutors in a row that had rumbled on for months.
Opponents said he fired the attorneys for political reasons and later lied about the reason for their dismissal.
He testified before committees in both houses of Congress, but senators later said he lied under oath. Mr Gonzales has repeatedly said that he did nothing wrong.
Democratic Senator Harry Reid said on Monday that the investigation would not end with Mr Gonzales' departure.
"Congress must get to the bottom of this mess and follow the facts where they lead, into the White House," he said.
The BBC's James Coomarasamy, in Washington, says Mr Gonzales has been one of the closest and most trusted advisers to Mr Bush for many years, but also one of the most controversial.
As well as the sackings row, Mr Gonzales was criticised for helping to expand presidential powers in connection with the administration's war on terror - from drafting the controversial rules governing prisoners at Guantanamo Bay to authorising a secret phone tapping programme.
Mr Gonzales drafted the rules governing Guantanamo Bay
He was censured by some human rights groups after writing a memo to the president in which he said the war against terror was a "new kind of war" that rendered obsolete Geneva's strict limitations on questioning of enemy prisoners and rendered "quaint" some of its provisions.
Mr Gonzales stuck to his views, although he also made it clear that he did not approve of torture.
The memo came to light after the Abu Ghraib prison abuse scandal in Iraq.
A long-time ally of Mr Bush, Mr Gonzales had worked with the president since his days as Texas governor and was the country's first attorney general of Hispanic descent.
He is the latest senior official to leave the White House as the president approaches the end of his second term in office.
Karl Rove, Mr Bush's most trusted and senior adviser, announced earlier this month that he was stepping down.
Paul Wolfowitz, president of the World Bank, agreed in May to step down amid a row over the hiring of his girlfriend.
Donald Rumsfeld, one of the lead architects of the Iraq war, quit as defence secretary after a Republican battering at the polls in November's mid-term election.