7 March 2015, 00:22 GMT
The Department of Justice report, released about a week ago, named Shaw as one of the officials responsible for Ferguson's racially biased policing record, the New York Times reported.
The Times reported a few muted cheers rang out at the City Council meeting when the announcement was made. The Council voted unanimously to accept the resignation, effective immediately.
"We appreciate John's service and commitment to the City of Ferguson for the past eight years," Mayor James Knowles III said in a written statement. "The City Council and John Shaw feel that this is an appropriate time to move forward as we begin our search for a new city manager."
