"To every New Yorker and all those that believed in what I tried to stand for I sincerely apologize," Spitzer told reporters at a press conference in Manhattan. "I cannot allow my private failings to disrupt the public's work."
"In the past few days I have begun to atone for my private failings with my wife Silda, my children and my entire family. The remorse I feel will always be with me. ... I am deeply sorry that I did not live up to what was expected of me," said Spitzer, speaking with his wife at his side.
The resignation will be effective Monday. Lt. Gov. David Paterson will take over for Spitzer, and will become New York's first black governor. He will also be the first legally blind person to hold the office and the state's first disabled governor since Franklin D. Roosevelt.
The New York Times first reported Monday that Spitzer was caught on a federal wiretap arranging to meet, and pay for, a prostitute in Washington, D.C., last month.
Law enforcement officials told the paper Tuesday that Spitzer had more than six meetings with prostitutes over the last year, and paid tens of thousands of dollars to the ring.
Over the last two days, state Republicans and some Democrats called for Spitzer to step down as the allegations set off a media furor. Republican lawmakers said they would have the governor impeached if he did not resign.
The case stemmed from an investigation into Spitzer's finances after transfers from several accounts caused a bank to file a suspicious activity report with the Internal Revenue Service, a law enforcement official told the Associated Press.
The IRS contacted the FBI, which began investigating for possible government corruption or money laundering. The account transfers were instead linked to the prostitution ring and a court ordered wiretap was obtained.
The prostitution ring was broken up last week and four arrests were made. A 47-page affidavit supporting the charges said investigators intercepted 11,000 telephone calls, text messages and e-mails.
Spitzer, who is married with three teen-aged daughters, was captured on at least one phone call and is referred to in the document as "Client 9," the Times reported.
In one excerpt from the affidavit, one of the charged individuals "confirmed that Client 9 would be paying for everything, train tickets, cab fare from the hotel and back, mini-bar or room service, travel time and hotel."
Spitzer has not yet been charged with any crime. In a statement issued after the resignation announcement, U.S. Attorney Michael Garcia said there was no deal with the fallen governor: "There is no agreement between this office and Governor Eliot Spitzer, relating to his resignation or any other matter."
Prior to the allegations, Spitzer was a rising Democratic power player in the second year of his first term as New York governor. He won the office by a historic margin on Jan. 1, 2007, becoming the first Democratic governor of the state in more than a decade.
His popularity has slumped since then, in part because of a failed controversial plan to allow illegal immigrants to obtain driver's licenses, and an unsuccessful bill proposing legalized same-sex marriage in the state.
As his political career took shape, Spitzer championed ethics reform and promised to go after government corruption. In his previous position as New York's attorney general, Spitzer built a reputation as a crusader.
He became known as the "Sheriff of Wall Street," for going after Wall Street big shots, such as former New York Stock Exchange director chairman Richard Grasso.
Spitzer uncovered corruption in corporate boards, the insurance industry, and the prescription drug and power industries. Grasso was targeted over a $187.5 million compensation package.
Ten top Wall Street firms agreed to pay $1.4 billion in December 2002 to settle allegations levelled by Spitzer and others that they intentionally misled investors to help corporate clients.
Two prostitution rings were also targeted by Spitzer when he was head of the state's organized crime task force.
Those close to Spitzer were shocked by the revelations.
"These are serious and disturbing accusations that are completely at odds with the man I know," Gov. Jon Corzine of New Jersey told the New York Times.