According to Re/Code, Steve Huffman, the original Reddit CEO, will take over the position immediately.
Pao stressed that it was a "mutual decision" and that she had "not" been fired. She also declined to give the reason for her resignation.
Much of the backlash over Pao's leadership stems from her decision to dismiss former Reddit employee, Victoria Taylor. Pao claimed that Taylor's dismissal came after a "long history of mistakes," but long-time users of the site rallied to Taylor's defense, with over 213,000 people signing a petition to have Pao fired.
"I know many of you may be curious about what's next for me, and I'm still figuring that out," Taylor wrote on Reddit shortly after being fired. "However, I can assure you, wherever the road leads, I will live up to the faith you've had in me."
In a show of protest against Pao, Reddit moderators shut down large parts of the website. Many site users also expressed outrage at Taylor's firing.
"Unpaid moderators ('subreddit' leaders who perform the drudgery of running some of the Internet's most prolific forums) who worked closely with Taylor say this will make their jobs harder, because they're stretched thin already," Noah Kulwin wrote last week for Re/Code.
— Matt Ford (@fordm) July 10, 2015
Pao had also been the subject of controversy due to an earlier decision to alter the site's harrassment policy. While the new guidelines led to the banning of five communities, many saw it as a violation of Reddit's core principal of promoting free speech.
Huffman said he is excited about returning to the position.
"I am a huge part of Reddit and Reddit is a huge part of me," he said, according to Re/Code, adding that he thinks the community can be "ten times as large and I have a clear vision of how to get there."
"It was sickening to see some of the things redditors wrote about Ellen," Altman wrote. "The reduction in compassion that happens when we're all behind computer screens is not good for the world. People are still people even if there is Internet between you."
Pao had lost a discrimination case earlier this year, alleging that her gender had played a role in former employer Kleiner Perkins' decision not to promote her.