Penny Lawrence's resignation comes after the UK threatened to pull public funding from Oxfam over an alleged cover-up of its staff hiring prostitutes in Haiti during a 2011 relief effort on the earthquake-hit island.
British charity Oxfam said on Monday that Deputy Chief Executive Penny Lawrence had resigned, taking responsibility for how the organisation "failed to act adequately" in response to concerns raised internally about sexual misconduct by some members of staff.
The resignation comes as Oxfam is battling to save its British government funding after a newspaper reported alleged sexual misconduct by Oxfam staff in Haiti during humanitarian relief operations there following a 2010 earthquake.
“Over the last few days, we have become aware that concerns were raised about the behaviour of staff in Chad as well as Haiti that we failed to adequately act upon," Lawrence said in a statement.
"It is now clear that these allegations - involving the use of prostitutes and which related to behaviour of both the Country Director and members of his team in Chad - were raised before he moved to Haiti."
Britain's top development official Penny Mordaunt on Sunday threatened to pull public funding from Oxfam unless it came clean about a sexual misconduct scandal in Haiti.
Mordaunt excoriated the leadership of Oxfam for its handling of allegations that some of the anti-poverty charity's staff in Haiti used prostitutes, including Haitians who might have been minors at the time.
It's not been proved the prostitutes were minors, but the charity is being accused of covering up the scandal.
TRT World's Sarah Morice reports.
Oxfam demonstrated a "failure of leadership" when it failed to fully inform authorities and because it didn't prevent the alleged perpetrators from going to work for other charities, she said.
Mordaunt made clear that all aid agencies must show "moral leadership" in tackling sex abuse or risk losing their taxpayer funding.
"What is so disturbing about Oxfam is that when this was reported to them, they completely failed to do the right thing," Mordaunt told the BBC on Sunday.
"That's what we need to focus on, and that's what ultimately will stop predatory individuals from being able to take advantage of vulnerable people."
Oxfam announced seven measures on Sunday designed to strengthen its handling of sexual abuse allegations.
The package includes improving the vetting of employees, creating an external complaint line for whistleblowers and working with other charities to overcome the "legal difficulties" that kept them from sharing information on sexual misconduct cases.
"We will continue to address the underlying cultural issues that allowed this behavior to happen," Caroline Thompson, the chair of Oxfam Great Britain's board of trustees, said in a statement.
"We also want to satisfy ourselves that we do now have a culture of openness and transparency and that we fully learn the lessons of events in 2011."
The Times of London reported last week that seven former Oxfam staff members who worked in Haiti after the 2010 earthquake that devastated the country were the subject of misconduct allegations that included the use of prostitutes and downloading pornography.
Oxfam's investigation into the charges was hampered by a "determination to keep it out of the public eye," the Times said.
The charity said it reported the findings to Britain's charity regulator and to major donors, including the Department for International Development, the department Mordaunt heads.
The department gave Oxfam $43.8 million last year.