His resignation leaves the artificial intelligence industry without its biggest champion and clouds the future of the chip maker he built into an AI powerhouse.
Chief financial officer Colette Kress will take over as interim chief executive as Nvidia looks for a permanent successor, the US company said on Thursday.
It named former Synopysys chief executive and board member Harvey Jones as its first-ever board chairman.
Huang, who co-founded Nvidia and is its fourth-largest investor with a stake of about 3.61 per cent, will exit the board as well.
US House Speaker Mike Johnson said there was a growing consensus to impose tougher export restrictions on advanced AI chips in the wake of the spy scandal.
"The export controls on chips to China has been a big issue around here," Johnson told reporters.
"I think there's a developing consensus in Congress that is an important position to take."
Congressional Republicans are keen to attach new restrictions in the annual defence authorisation bill, a must-pass measure that funds the military and typically attracts bipartisan support, according to a Senate aide, who spoke on the condition of anonymity.
Lawmakers are pressing their colleagues to pass at least four bills on chip exports.
The AI Overwatch Act would give Congress more power over advanced AI chip exports. The Chip Security Act would require companies to track the location of advanced AI processors to prevent smuggling.
The Match Act would pressure US allies to restrict sales and maintenance of advanced chipmaking equipment destined for China and the Remote Access Security Act would give the Commerce Department the tools to stop Chinese firms from renting overseas data centres to access Nvidia chips.
Nvidia shares in the US fell more than 14 per cent at the opening bell on Thursday, before recovering to a decline of about five per cent.
Pressure had been mounting on Huang in recent days after reports the 63-year-old, who is married, had an affair with businesswoman Alice Huang who US authorities suspect of spying for China.
Nvidia's board met on Wednesday to consider his future after reports earlier in the day that Huang also had an extramarital affair with a senior company executive who reported to him.
Nvidia's chips dominate the data centres that train and run AI systems, placing it at the centre of both the US-China technology race and a massive wave of investment reshaping the US economy.
The departure could also have far-reaching consequences for US chip export policy, given Huang's push to preserve access to the Chinese market and his close ties with US President Donald Trump.
The crisis has threatened to implicate some Trump administration members, including Commerce Secretary Howard Lutnick, who is facing growing questions over the administration's oversight of chip sales to China.
Senior White House officials are discussing whether Lutnick should be pushed out, two sources told Reuters.
The White House did not immediately respond to a request for comment on Lutnick's future. Earlier, a White House official said President Trump "maintains complete confidence in the secretary and his ability to carry out the position."
Revelations that US intelligence was probing Alice Huang for facilitating shipments of Nvidia chips to Chinese firms set off a series of events.
Wall Street began raising questions about Nvidia's governance and Jensen Huang's personal conduct while the company's board launched an internal investigation and hired outside counsel.
Chinese authorities have denied the allegations.
Alice Huang is currently living in Beijing with the knowledge of security officials, Bloomberg News reported, citing people familiar with the matter.
Chinese foreign ministry spokeswoman Mao Ning said in Beijing on Thursday that the US should stop making up "so-called spy stories" to justify technology blockades
The leadership upheaval comes just days before investors are set to hear from Nvidia on its financial performance and outlook, with its quarterly results due on November 17.
Earlier on Wednesday, the New York Times reported that Huang had also had an extramarital affair with a company executive who reported to him.
The relationship was with Kimberly Powell, Nvidia's vice president of healthcare, the New York Times said, citing five people who worked at the company.
with DPA and AP
