Israeli army Major General Udi Adam, who had a key role in commanding Israeli forces during the conflict with Hezbollah in Lebanon, has resigned.
There had been speculation the general would step down
He is thought to be one of the first senior officials associated with the war to leave his post.
His resignation, which the Israeli army says it has accepted, comes at a time of continuing public criticism about the way the conflict was handled.
Israel has launched a probe on the role of government and military in the war.
There had been widespread speculation the general would step down as head of the Northern Command after he was sidelined at the height of the conflict.
Critics say many mistakes were made, including a misjudgment of Hezbollah's capability and a failure to free the two Israeli soldiers whose capture sparked the fighting.
On Tuesday, Hezbollah's leader Hassan Nasrallah said the two soldiers held by his group would only be released if Lebanese militant Samir Qantar, who has been held by Israel for 27 years, was also freed.
Maj Gen Adam has decided to retire "when the last soldier returns from Lebanon", which is expected next week, the Maariv daily newspaper reported on Wednesday.
He had faced criticism in the Israeli media and among defence analysts that he was too cautious.
He was a key military figure in the conflict, in command of the north of Israel when militants entered from Lebanon and captured the two Israeli soldiers.
Once war started, Gen Adam was the officer on the ground in charge of the campaign.
During the conflict, the army chief of staff Lt Gen Dan Halutz appointed his own deputy, Maj Gen Moshe Kaplinski, as commander of operations in Lebanon, with a key role in securing the Israel-Lebanon border.
The move was widely seen as a decision to sideline Gen Adam who was thought to have disagreed with the chief of staff about strategy.
"The state of Israel definitely owes [Adam] a great debt," Defence Minister Amir Peretz told Israeli radio on Wednesday.
"No doubt we need to examine the meaning of the [move], why he decided to do it... Such an announcement by a general cannot be ignored."
Pressure on others
The general's resignation is not entirely surprising, but it is significant at a time when many in Israel are still calling on their leaders, both military and political, to take responsibility for the way the war was handled, says the BBC's Jill McGivering in Jerusalem.
Debate about failures in military strategy - and intelligence - is persisting.
Many still say the war failed in its objectives - to free the captured soldiers and chasten Hezbollah militants.
A month after the ceasefire started, that process of self-examination and holding to account has barely begun, our correspondent adds.
Debate is continuing about how far-reaching and how powerful official inquiries should be.
Gen Adam's resignation may increase the pressure on other figures, also central to the campaign, our correspondent says.