|"We are an army medical department at war, supporting an army at war - it shouldn't be and it isn't about one doctor" |
The report also said that injured troops faced labyrinths of bureaucracy to get treatment and benefits.
The problems at Walter Reed Army Medical Centre in Washington caused deep alarm in the Bush administration, which frequently praises the sacrifice of US troops and has said they deserve the very best care.
"I submitted my retirement because I think it is in the best interest of the army," Kiley said in a statement.
"We are an army medical department at war, supporting an army at war - it shouldn't be and it isn't about one doctor."
The commander at Walter Reed has already been fired and Francis Harvey, the army secretary, resigned.
Harvey's move came at the request of Robert Gates, the defence secretary, officials said.
Asked about Gates's reaction to the latest resignation, Pentagon spokesman Bryan Whitman said: "The secretary of defence supports the actions that the acting secretary of the army has been taking in dealing with this issue."
As a former commander at Walter Reed, Kiley had been accused of ignoring warnings about outpatient care.
Critics also charged that as surgeon-general he played down the Washington Post's reports.
Kiley disputed the allegations that he had ignored problems but apologised for general failings in outpatient care.
The Post had found that recuperating soldiers at Walter Reed were living in a dilapidated building infested with mice, mould and cockroaches.
The newspaper also found wounded troops forced to untangle a web of bureaucratic red tape to obtain benefits and treatment as they coped with physical and psychological trauma.
The army says some of the problems with living conditions have already been fixed.
More than 10,620 US troops in the Iraq war and more than 670 in the Afghan conflict have been wounded seriously enough to keep them from active duty, according to Pentagon figures.