Protesters have occupied the centre of Canada’s capital for 19 days, halting traffic and enraging residents.
The prime minister on Monday invoked the Emergencies Act as a “last resort” in response to the protests.
The Ottawa Police Services Board confirmed Mr Sloly’s resignation at a public meeting on Tuesday.
In a statement on Twitter, Mr Sloly defended his policing record and said that he was stepping down “with a heavy heart”.
“Since the onset of this demonstration, I have done everything possible to keep this city safe and put an end to this unprecedented and unforeseeable crisis,” he said.
“I am confident the Ottawa Police Service is now better positioned to end this occupation,” he added.
A former Canadian men’s soccer player, Mr Sloly took over at the Ottawa Police Service in 2019, more than three decades after joining the Toronto police. His contract in Ottawa was due to end in 2024.
Throughout his career, he gained a reputation as a progressive reformer, dedicated to improving police-community relations.
However, his critics say he has not done enough to crack down on the “Freedom Convoy” protests. The city of Ottawa declared a state of emergency over a week ago in attempt to quell the protests.
As of last week Mr Sloly, 55, stood by his response, telling Newstalk 580 he had “absolutely no” intention to step down.
On Monday, Prime Minister Justin Trudeau took the unprecedented step of invoking the Emergencies Act, which he said would give local police “more tools” to deal with protesters. Members of the Royal Canadian Mounted Police (RCMP) and the Ontario Provincial Police (OPP) will be deployed to assist.
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