He did so in an attempt to end the violence which has plagued the country.
The violence began several years ago, but intensified after he was put into power by the National Transition Council.
In 2013, France and the African Union sent troops to try and force a ceasefire, within the CAR.
Djotodia's removal from office had been a key demand of the opposition and many of the rebel groups.
News of his resignation was met by cheering and celebration in the streets.
It is yet unclear if his resignation will have the desired effect or if the fighting will continue on anyways.
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