He will be replaced by deputy director Kang Seung-ah, who will step in as acting managing director.
The festival also said that chairman Lee Yong-kwan has handed in his resignation.
The festival issued an official apology last week for the turmoil.
Busan International Film FestivalArtyooran / Shutterstock
He also apologised for the current situation and said he believed it would be resolved with his resignation.
Running alongside the festival, Busans Asian Contents & Film Market is scheduled for October 7-10.
