The development comes after Paratici's worldwide ban by FIFA was upheld on Thursday following an appeal.
Back in January, Paratici was banned for 30 months by the Italian Football Federation as part of punishments handed to Juventus for financial misappropriation.
Paratici was previously managing director at Juventus before joining Spurs in the summer of 2021.
Juventus have had their 15 points deducted in January restored but Paratici's ban continues.
Tottenham said in a statement: “The current worldwide ban prevents Fabio from fulfilling his duties as our managing director of football. Fabio has consequently taken the decision to resign from his position at the club with immediate effect to focus on his legal position in respect of the FIGC [Italian Football Federation] and Fifa rulings.”
The chairman, Daniel Levy, said: “This has been a stressful time for Fabio and his family. We wanted to ensure that we allowed for due process to be followed. Fabio is a man who lives and breathes football – we wish him well.”
"As outlined in our year-end results, we started several months ago to restructure our football operations and last week announced the appointment of Scott Munn as chief football officer to head up all the departments.
"We shall continue to strengthen our football functions over the coming months."
