Hiroshi Sasaki said plus-size entertainer Naomi Watanabe could wear pig ears at the opening ceremony.
He later apologised and admitted his remarks were a huge insult to her. Ms Watanabe has yet to respond.
The incident comes after ex-Games president Yoshiro Mori was forced to quit for making sexist remarks.
“There was a very inappropriate expression in my ideas and remarks,” Mr Sasaki said in a statement released through the Games organising committee. “I sincerely apologise to her and people who have felt discomfort with such content.”
Ms Watanabe, 33, is one of Japan’s most famous comedians and is known for her celebrity impersonations and body positivity advocacy work.
Mr Sasaki, 66, who is in charge of the Olympic opening and closing ceremonies, had made the suggestions involving Watanabe last year via a group chat on messaging app Line. The proposal was immediately rejected by his colleagues, who told him it was inappropriate.
His resignation came shortly after the weekly magazine Shukan Bunshun reported his remarks on Wednesday, 17 March.
Organisers have said that current Games president Seiko Hashimoto plans to address the matter at a news conference.
Former Olympian and Japan’s ex-Olympics minister Ms Hashimoto was appointed Games president last month after Mr Mori sparked backlash when he said that women talk too much. He also said that meetings with many female board directors would “take a lot of time”.
Since taking on the role, Ms Hashimoto has pledged to make gender equality a top priority at the Games, adding 12 female directors to the organising committee’s executive board.