He made the announcement on Tuesday morning at an unexpected 7am press conference at the Finance Ministry.
He said he was resigning as he felt he was lacking loyalty and support from the conservative ÖVP and the Social Democrats (SPÖ) in the current tax reform debate.
He said that reform was necessary to relieve the burden on the tax payer but that it must come at "the right time".
"There has to be cohesion in a party. If the cohesion is no longer there, then the moment has come to hand over the tiller," he said.
The ÖVP has been locked in a battle with its senior coalition partner, Chancellor Werner Faymann's SPÖ, over how to finance income tax cuts to give a boost to the economy.
Spindelegger has been under pressure recently within his own party, with many demanding a greater urgency for tax reform and expressing discontent with the course the party has been taking.
He has refused to cut taxes unless the cuts can be financed without new levies.
Spindelegger is also the chairman of ÖVP, and has said he will resign from all his offices. There is no immediate indication as to who will succeed him.
The 54-year-old has been Vice Chancellor and ÖVP chairman since 2011, and Finance Minister since December 2013.