Bertie Ahern resigns from Fianna Fail amid moves to expel him and vows to clear his name over accusations of corruption.
In an article in Ireland's Sunday Independent newspaper, Ahern said news of a motion to expel him from the party had "deeply saddened" him.
The tribunal found that Ahern failed to truthfully account for a total of 165,214.25 Irish punts ($262,000) passing through accounts connected with him.
Ahern's move came days before party officials were due to meet to consider expelling Ahern, who was one of the architects of Ireland's ill-fated economic boom.
Set up in 1997, the Mahon Tribunal probed the relationships between politicians and property developers after builders made vast profits on land re-zoned as commercial.
In its report, which ran to over 3,000 pages, it said corruption was "endemic and systemic" at every level of government in Ireland in the late 1990s.
Ahern was Taoiseach, or prime minister, from 1997 to 2008.
The Irish government has asked the Irish police to look at the findings of a report into corruption in Ireland's planning process.
'Not an admission'
Ahern categorically denied any wrongdoing and said he would clear his name.
"My resignation is not an admission of wrongdoing in regard to the report of the Mahon Tribunal and nobody should try to interpret it in that way," he said in the statement.
"I reject the findings of this inaccurate and unsubstantiated report in the strongest possible manner," he added.
The verdict came four years after the economy collapsed under the strain of a decade-long housing and banking boom, cultivated by Ahern and his Fianna Fail party, and a year after the party was ejected from power by angry voters.
Ahern, who described his finances as "chaotic" during his time as leader, was one of Europe's longest serving premiers and was widely praised for his work in resolving the conflict in Northern Ireland.
Viva Economic Justice!!!!
Michael “Waterman” Hubman