"According to the oath we took" in which "we committed to work towards free and transparent elections and to carry out our duty independently and impartially... We have decided to resign," Sarsar said, announcing he, his deputy and another member of the electoral commission were quitting.
"We were compelled to resign" over disagreements on "the founding values and principles of democracy", he said at a news conference.
Sarsar did not elaborate and AFP was unable to reach him afterwards.
Zargouni told AFP said there had been "great clashes within" the commission.
A commission employee, who asked to remain anonymous and had attended a meeting with Sarsar after the news conference, told AFP the outgoing electoral chief had said he refused to "witness fraud".
Sarsar and the commission were praised for their organisation of legislative and presidential elections in 2014, following the 2011 revolution that toppled longtime dictator Zine El Abidine Ben Ali.
He had in recent months been pushing hard for the holding of long-awaited municipal polls, which after a series delays were finally set for December 17.
The commission "showed it was capable of successfully overseeing an electoral process in an emerging democracy. It's also one of the rare independent institutional bodies in the new Tunisia," he said.
Tunisia, which set off the Arab Spring uprisings with its overthrow of Ben Ali, has been hailed for a relatively smooth democratic transition since the revolution.
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