Eliot Spitzer's resignation had been widely expected since he said on Monday that he had acted in a way that violated any sense of right or wrong.
With his wife still at his side, he told a news conference on Wednesday that he could not allow his private failings to disrupt the public's work.
An FBI investigation has implicated Mr Spitzer in the alleged use of a $1000-an-hour prostitution ring. He has apologised, but without giving details.
Married with three teenage daughters, Mr Spitzer was once dubbed the "The Sheriff of Wall Street" because of his hardline stance on corruption and prostitution.
Republicans in the New York senate such as Majority Leader Joseph Bruno had been threatening impeachment if Mr Spitzer failed to step down.
Staff members at the state assembly watched as Mr Spitzer announced the end of his governorship. He was elected state governor in 2006 after serving as attorney-general.
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