Ouellet's departure comes a week after he denied allegations of sexual misconduct made against him by a second woman.
Quebec Cardinal Marc Ouellet has submitted his resignation as prefect of the Dicastery for Bishops and his resignation has been accepted by Pope Francis.
Ouellet was one of the few prefects Pope Francis retained from the papacy of Benedict XVI in what was perceived as a sign of confidence.
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At 78, Ouellet was three years over the age of retirement for bishops. His departure had been rumoured for months.
Ouellet has been involved in allegations of misconduct while Archbishop of Quebec, allegations he has firmly denied. After the Vatican last year ruled the affair to be without sufficient grounds, Ouellet sued his accuser for defamation.
A week ago, Ouellet denied allegations of sexual misconduct made against him by a second woman.
On Monday, the Vatican named American Bishop Robert Francis Prevost to succeed Ouellet at the Dicastery for Bishops.
Like Ouellet, Prevost, 67, oversaw the Pontifical Commission for Latin America.
Ouellet was born in the village of La Motte near Amos in the Abitibi-Témiscamingue region. He was ordained in 1968 and named Archbishop of Quebec in 2002.
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Second allegation of sexual misconduct surfaces against Quebec Cardinal Marc Ouellet
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Cardinal Marc Ouellet denies allegations of sexual misconduct by second woman
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Quebec woman alleging sexual misconduct by prominent cardinal reveals identity