The prosecutor found no evidence to support the bribery allegation.
"Today, I have decided to step down from the Samsung group chairmanship," Lee said on national television on Tuesday.
"I express my deepest apologies for causing great concern to the public as a result of the special probe."
"I am saddened as there is still much to do and a way to go, but I will leave with all the faults of the past," he added.
"I express my deepest apologies for causing great concern to the public"
Lee faces up to five years in jail if found guilty of tax evasion.
News of Lee's resignation saw the shares in Samsung affiliates slide by as much as four per cent.
Samsung in a statement said four other executives including Lee Hak-soo, the vice-chairman, will also be stepping down.
One of them, Lee's son, Lee Jae-yong, seen as the next in line for Samsung's top slot, is expected to serve in another role abroad.
Listed Samsung group firms account for 20 percent of the total market capitalisation on the main board of the South Korean bourse, according to its data.