But Palin has consistently denied any wrongdoing.
In a fiery campaign-style speech in Alaska on Sunday, Palin said she was stepping down to take her political battles to a larger – but unspecified – stage.
“With this decision, now, I will be able to fight even harder for you, for what is right, and for truth. And I have never felt that you need a title to do that,” Palin said to raucous applause from about 5,000 people gathered at Pioneer park in Fairbanks, Alaska.
“With this decision, now, I will be able to fight even harder for you, for what is right, and for truth”
She has also said she wants to campaign for political candidates from coast to coast, and continue to speak her mind on the social micro-blogging site Twitter.
But her resignation midway through her term as governor, with 17 months to go, has not gone down well with many Americans.
A Washington Post-ABC poll this month indicated her favourability rating had dropped from nearly 60 per cent about a year ago to 40 per cent.
In her farewell speech, she warned Americans to “be wary of accepting government largess”, pronouncing that “it doesn’t come free”.
She also took aim at the media, saying her replacement, Sean Parnell, who served as her lieutenant-governor, “has a very nice family too, so leave his kids alone!”
Parnell, 46, of Anchorage, was sworn in Sunday as the new governor and has promised to push many of Palin’s initiatives, including controversial terms to build a natural gas pipeline.
Palin also told the media that “in honour of the American soldier”, they should “quit making things up”.
She did not elaborate, but had said when she announced her resignation on July 3 that she was tired of the media focus on her family and felt she had been unfairly treated by reporters and bloggers.
Palin has not ruled out seeking higher office in Washington and her political action committee, SarahPAC, has raised more than $1m, said Meghan Stapleton, a spokeswoman.
Stapleton said Palin was still deciding on her future and details would emerge in the coming weeks.
Alaska’s first female governor arrived at the state capitol in December
2006 on an ethics reform platform after defeating two former governors in the primary and general elections.
Her prior political experience consisted of terms as Wasilla’s mayor and councilwoman and a stint as head of the Alaska Oil and Gas Conservation Commission.
Unknown on the national stage until McCain tapped her as his running mate, Palin infused excitement into the Republican’s presidential bid.
But she also became the butt of talk-show jokes and democratic criticism, especially after the Republican party spent $150,000 or more on a designer wardrobe for her.