In a statement published on his personal blog on Monday, Varoufakis said he was stepping down to allow Greek Prime Minister Alexis Tsipras to reach a new deal with European creditors.
"Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted 'partners', for my … 'absence' from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement," Varoufakis wrote on his blog.
"For this reason I am leaving the Ministry of Finance today. I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday's referendum. And I shall wear the creditors' loathing with pride."
Al Jazeera's John Psaropoulos, reporting from Athens, said the decision to step down was expected and not a surprise.
"Many times since he took office in January he's said that he's not in it for the long haul, he said that he's not a politician, he's a technocrat, an academic," Psaropoulos said.
The announcement came as European Union leaders scrambled for a response on Monday, following the overwhelming "No" vote in Sunday's referendum.
German Chancellor Angela Merkel and French President Francois Hollande were expected to meet in Paris on Monday, after calling for an emergency eurozone summit in a phone conversation after the result of the vote became apparent on Sunday.