The last speaker to be forced from his position was Sir John Trevor, who was found guilty of accepting a bribe in 1695.
Martin's resignation comes amid a scandal over politicians' expenses, that has shaken Britain's main political parties, with revelations of party members claiming for moat cleaning, chandeliers and mortgage repayments.
The speaker, while not accused of abusing his expenses, had been criticised for opposing reforms that would make politicians' financial claims more transparent.
In a dramatic parliamentary session on Monday, MPs publicly called for him to step down, with a no-confidence motion signed by 23 ministers.
Analysts have said Martin's departure would be only the first step in a purge of parliament.
Rodney Barker, a professor of government at the London School of Economics, said Martin's departure shows parliament is taking reform seriously.
"It won't solve anything at all, but if his successor could appear to be taking charge of things in a way that implements proper procedures, probity, and decent use of public money, that would be the very opposite of Michael Martin's position," he said.
Martin was elected as speaker in 2000, after spending many years as a Labour backbencher.
The new speaker will step into a role that includes keeping order during parliamentary debates, and deciding which politicians are allowed to speak, remaining impartial at all times.