German football has been caught in the storm unleashed by a report in magazine Spiegel last month which alleged that a €6.7-million payment made by football association DFB to FIFA was used to buy votes in order to secure the hosting of the World Cup known affectionately in Germany as the "Summer Fairytale".
The scandal took a dramatic twist last week with police carrying out raids at DFB headquarters and prosecutors revealing that three men - including the DFB chief - were being investigated for serious tax fraud surrounding the FIFA payment.
Prosecutors said they had only refrained from pursuing accusations of corruption because the statute of limitations had expired.
But Niersbach, who announced his resignation following a crisis meeting at the DFB, said he was guilt-free.
"I was there from the first day of the bid for the 2006 FIFA World Cup all the way to the final film of the 'summer fairytale' and have worked throughout all the years ... in a clean, reliable and correct manner," he said.
"In my assigned areas of marketing, media, accreditations and event organisation, I can say with a clear conscience that I am personally beyond reproach," he added.
"It's all the more depressing and painful for me to be confronted, nine years later, with transactions that I was not involved in and which leave many questions open for me," said Niersbach.
Vice-presidents Reinhard Rauball and Rainer Koch are taking over as interim co-chiefs of the German football federation DFB.
'More than a job'
Niersbach had, in the early days of the scandal, called a press conference in a bid to explain the €6.7 million payment.
He said then that he had learnt in June of the issue but that the sum was made in order to receive a larger subsidy from FIFA worth €170 million.
German football legend Franz Beckenbauer, who led the committee for the World Cup bid, appeared to back up Niersbach's claim, saying that in order to obtain a FIFA grant, "we accepted a proposition from FIFA's finance commission that the implicated parties should, in retrospect, have refused".
But FIFA quickly refuted the claims, and has since revealed it is investigating Beckenbauer, although it did not say over what.
On Monday, Niersbach insisted he had "no knowledge of the background of the transactions in question".
He said his 27 years at the DFB, first as media chief before moving up the chain to become general secretary in 2007 and then president in 2012, were "always more than a job for me".
"The work in the different functions was close to my heart. I love football and this federation... In order to protect the DFB and this office, I am stepping down as DFB president with a heavy heart," said the 64-year-old former journalist.
German team coach Joachim Löw expressed sadness at Niersbach's resignation.
"Of course I am very affected, surprised and very sad over it," he said. "Irregardless of the legal facts, I think that Wolfgang was a fantastic man, and a fantastic president for us," said Löw.
"He has always loved football, and done everything for football. He was an excellent point of contact for us and that's why I'm very very sorry that he has resigned."