Labour's acting president was a member of the panel that held an investigation earlier this year into allegations against a Labour Party staffer.
Former president Nigel Haworth stepped down yesterday.
Today, the staffer at the centre of the allegations also announced his resignation . In a statement sent to media, the staffer said: "I adamantly refute the serious allegations made against me."
Under the Labour Party constitution, the senior vice president, who is Tracey McLellan, by-default will now be acting president until a new one is elected.
Earlier this year, Labour began investigating after seven people made complaints against the staffer. An investigation panel was set up by Labour's highest governing body, the NZ Council, which included Ms McLellan. Three months later, the staffer was cleared.
The Prime Minister, who accepted his resignation today, is under pressure about how she handled the process.
A Queen's Counsel (QC) is now completing a report on the matter. This week a woman claimed she raised a sexual assault allegation with the investigation.
Prime Minister Jacinda Ardern said today Ms McLellan as acting-president was "very temporary".
She said it was "obviously an automated process" and it took "a matter of weeks" for members to vote on a new president.
"It would be a decision for NZ Council if there is any alternative to that," the Prime Minister added.
"That is only a temporary position until the role is balloted. Those are matters for the NZ Council."
As 'Parliamentary Leader', Ms Ardern herself is a member of the Labour Council.
Ms Ardern admitted failures in the process into the investigation.
"I don't need the QC process to tell me that, there's obviously been failures here."
Ms Ardern was asked what she would say to those who criticised her for not knowing about the allegation of sexual assault prior to this week.
"I'm not going to deny mistakes have been made here," she said.
"I am indeed the leader of the Labour Party and that is why I have offered an unconditional apology to those who have been involved in this case.
"My job now is to fix it."
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