US President said Acosta initiated the resignation by calling him Friday morning and saying he felt he had become a distraction to the administration.
US President Donald Trump said on Friday that Labor Secretary Alexander Acosta has resigned, believing that he has become a distraction to the administration because of his handling of the sex abuse case against financier Jeffrey Epstein a decade ago.
Acosta joined Trump on the White House lawn as Trump announced the resignation and Trump praised him as a "great, great" labor secretary.
Trump said Acosta initiated the resignation by calling him Friday morning and saying he felt he had become a distraction to the administration.
Trump named Deputy Labor Secretary Patrick Pizzella as the acting secretary of labor.
Acosta has served in Trump's Cabinet since April 2017 and from 2005 through 2009 was the US attorney for the Southern District of Florida. It was there that he handled Epstein's first case involving sex with girls, which resulted in a punishment that critics say was far too lenient.
Epstein, a billionaire hedge fund manager, pleaded not guilty to new federal charges in New York this week. Epstein had a social circle that over the years has included Trump, former president Bill Clinton and Britain's Prince Andrew.
Nancy Pelosi, the Democratic speaker of the House of Representatives, and Democratic Senate Majority Leader Chuck Schumer had called on Tuesday for Acosta to resign.
Acosta had responded to the criticism on Tuesday by saying on Twitter that Epstein's crimes were "horrific" and that he was glad prosecutors were moving forward based on new evidence and testimony that could "more fully bring him to justice."
On Wednesday Acosta held a news conference to defend his handling of the deal, which allowed Epstein to plead guilty to a state charge and not face federal prosecution. Acosta said Epstein would have had an even lighter sentence if not for the deal.
Acosta would not say if he would make the same decision regarding Epstein now, considering the power of the #MeToo movement that led to the downfall of several powerful men publicly accused of sex crimes by women.
US prosecutors in New York on Monday accused Epstein, 66, of sex trafficking, luring dozens of girls, some as young as 14, to his luxury homes and coercing them into sex acts.
Trump on Tuesday called Acosta an "excellent" labour secretary while saying that many people were involved in decisions on Epstein's case and that the matter was being reviewed.
The federal prosecutors in New York said they were not bound by the deal arranged by Acosta, which allowed Epstein to plead to a lesser offence and serve 13 months in jail with leave during the day while registering as a sex offender.
In February, a federal judge in West Palm Beach, Florida, ruled that the 2007 agreement violated the victims' rights. Epstein's case and Acosta's role in the plea deal had come under scrutiny earlier this year after an investigation by the Miami Herald.
The Epstein case came up at Acosta's Senate confirmation hearing but the Republican-majority Senate approved him in a 60-38 vote.
He is the latest top Trump administration official to depart under a cloud. The heads of the Interior, Justice, State and Health departments have also either been fired or resigned, among other top staff during Trump tenure so far.
Acosta, the son of Cuban refugees and the first Hispanic member of Trump's Cabinet, previously served on the National Labor Relations Board and in the US Department of Justice under Republican president George W Bush.