The referendum, in which 93 percent of voters backed the formation of a Kurdish state, led to clashes between Kurdish forces and troops from the central government in Baghdad.
Kurdish forces have since been driven out of many strategically important border regions as well as the oil-rich city of Kirkuk.
Barzani delivered news of his resignation in a closed door session of the Kurdish parliament.
He asked for the president’s powers to be divided between other members of the government until a presidential election can be held, probably some time next year.
"He remains the leader of the Kurdistan Democratic Party, which is the leading party in the Kurdistan region," said Kamran Matin, senior lecturer in the Department of International Relations at Sussex University, in the UK.
"But he and all the people who took part in the referendum feel humiliated and abandoned by the international community. That has the potential to leave the region with deep divisions. People are now afraid of potentially another civil war."
Blow to independence hopes
The referendum that led to Barzani’s resignation was opposed by other countries in the region, as well as by the US and the European Union.
But the US welcomed news of Barzani’s imminent departure, pledging to work closely with his nephew and prime minister Nechirvan Barzani.
"It’s been a rude awakening for the Kurdish people," said Shwan Zulal, a fellow at King's College London's European Centre for Energy and Resource Security and the managing director of Kanti Consultancy, which specialises in the Kurdistan region.
"They’ve realised not only is independence not possible for now but they’ve also lost a lot of land and a lot of sovereignty. The mood in the street is cautious, even depressing, especially since the loss of Kirkuk."
While the referendum had overwhelming backing in Kurdistan, it looks like it has pushed dreams of statehood futher away, according to experts.
"I think this catastrophe has delayed any effort for Kurdish independence in Iraq for at least half a century," said Abbas Vali, a retired professor of social and political theory and former head of the University of Kurdistan.