38-year-old Coun McNeill was arrested by Lincolnshire Police on September 28, and released the same day.
Two weeks prior on September 13, he stepped back as West Lindsey District Council leader, and then was suspended by the Gainsborough Conservative Association.
He also left his role as communications manager for Gainsborough MP Sir Edward Leigh.
A West Lindsey District Council spokesman confirmed Councillor McNeill had resigned as leader of the authority taking effect from Monday, November 2.
Coun McNeill will still remain a district councillor for the Nettleham Ward.
It is expected that a new leader will be appointed at the full council meeting on that date.
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