He was replaced by Rupert Murdoch, head of parent company 21st Century Fox and founder of the empire that includes Fox.
The company said in a statement that the resignation was effective immediately and that Murdoch, 85, would take over the roles of chairman and acting chief executive of Fox News Channel and Fox Business Network.
The news comes two weeks after Ailes was named in a lawsuit by the popular Fox News host Gretchen Carlson, who claimed she was fired for rejecting his sexual advances.
The move represents tremendous turmoil at Fox, built by Ailes and Murdoch two decades ago into the leading cable news channel, drawing praise especially from conservatives and criticism from the political left.
With the change, Rupert Murdoch returns to a bigger role a year after handing over more control of operations to his two sons.
"Roger Ailes has made a remarkable contribution to our company and our country," Murdoch said in the statement.
"Roger shared my vision of a great and independent television organisation and executed it brilliantly over 20 great years."
"I am personally committed to ensuring that Fox News remains a distinctive, powerful voice," he added. "Our nation needs a robust Fox News to resonate from every corner of the country."
Murdoch, who cut short a vacation on the French Riviera to return to New York, according to the Guardian newspaper, said he was taking the reins at Fox "to ensure continuity of all that is best about Fox News and what it stands for."
The two sons said in the statement that "we join our father in recognising Roger's remarkable contributions to our company," but also hinted about the accusations against him.
"We continue our commitment to maintaining a work environment based on trust and respect," the brothers said. "We take seriously our responsibility to uphold these traditional, long-standing values of our company."
A former consultant to Republican presidents, Ailes, 76, had been a key figure in the media empire and a longtime Murdoch ally.
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