He announced that he was standing down on Tuesday evening in a statement emailed to journalists. It had already been reported that he faced dismissal from the far-right new site over the comments, which sparked outrage.
He said: "I would be wrong to allow my poor choice of words to detract from my colleagues' important reporting, so today I am resigning from Breitbart, effective immediately. This decision is mine alone."
Mr Yiannopoulos, a vocal Donald Trump supporter who rose to fame for his far-right views, appeared to endorse sexual relationships between “younger boys and older men” in an excerpt from The Drunken Peasants podcast which aired a year ago.
He said in footage broadcast online that he defines paedophiles as people who are sexually attracted to children who have yet to hit puberty. He adds that he believes some teenagers under the age of 16 are able to consent to sexual activity.
At one point he refers to the possibility of relationships between 13-year-olds and 25 or 28-years-olds, claiming “these things do happen, perfectly consensually”.
He later said the podcast was selectively edited, and parts where he said the current age of consent is "about right" were removed.
The “alt-right” figurehead, who was permanently banned from Twitter in July after claims he helped lead the racist and sexist abuse of Ghostbusters actor Leslie Jones, had his book deal with publisher Simon & Schuster pulled in the wake of the remarks.
He was also dropped from speaking at the prestigious Conservative Political Action (CPAC) conference, which will feature President Trump and Vice-President Mike Pence, in Maryland next week.
Sources from Breitbart told Fox Business late on Monday that they were also considering dismissing him from the publication that helped launch his career.
There was reportedly a fierce internal debate about whether to keep him on, but a source said the decision was ultimately one related to branding, with senior executives debating how “damaging his comments are to the Breitbart brand”.
“Breitbart already has advertising issues regarding its association with the Alt-Right, and this doesn’t help the business side,” said the source.
On top of this, a senior editor at the publication told Fox Business “at least half a dozen” employees were prepared to leave the company if Mr Yiannopoulos stayed.
Mr Yiannopoulos ended his statement, which was tweeted by a journalist at the New York Times: “Breitbart News has stood by me when others caved. They have allowed me to carry conservative and libertarian ideas to communities that would otherwise never have heard them. They have been a significant factor in my success. I’m grateful for that freedom and for the friendships I forged there.
"When your friends have done right by you. you do right by them. For me, now, that means stepping aside so my colleagues at Breitbart can get back to the great work they do."
Breitbart said in a statement released shortly afterwards: "Milo Yiannopoulos’s bold voice has sparked much-needed debate on important cultural topics confronting universities, the LGBTQ community, the press, and the tech industry.
"Milo notified us this morning of his decision to resign as editor of Breitbart Tech and we accepted his resignation.”
In a press conference following his resignation, Mr Yiannopoulos said there were two comments in the podcast that did not accurately reflect his views, but suggested the rest did.
He said the scandal has been a "politically motivated witch hunt" and accused people of waiting until the "most damaging moment" to highlight footage that has been in the public domain for a year.
He added that he had not owned up to the comments before they were reported on by the press because he did not even remember making them.
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