Scotland Yard's Director of Public Affairs Dick Fedorcio has resigned, the Independent Police Complaints Commission said today.
The IPCC said that Fedorcio had a "case to answer" in relation to his awarding a contract for media advice to Neil Wallis, former deputy editor at the News of the World.
Wallis's company Chamy Media was paid £24,000 by the Met for communications advice between October 2009 and September 2010.
Fedorcio had been on extended leave from Scotland Yard since August pending the investigation into his relationship with the former News of the World executive, who was arrested on suspicion of phone-hacking last July but has not been charged.
The IPCC's report, which it sent to the Met on January 10, will be made public shortly.
IPCC Deputy Chair, Deborah Glass said in a statement:
“I have today been notified that Dick Fedorcio, the Metropolitan Police Service Director of Public Affairs, has resigned.
“In July 2011 the IPCC received a referral from the Metropolitan Police Authority in relation Mr Fedorcio.
“We decided to independently investigate the relationship between Mr Fedorcio and Neil Wallis, a former deputy editor at the News of the World, focusing on the circumstances under which a contract for senior level media advice and support was awarded to Mr Wallis’ company, Chamy Media.
“That investigation concluded and a report was sent to the MPS Directorate of Professional Standards on 10 January 2012.
“Our investigation found that Mr Fedorcio has a case to answer in relation to his procurement of the contract for Chamy Media. Last week the Metropolitan Police Service proposed to initiate proceedings for gross misconduct and I agreed with that proposal.
“In light of Mr Fedorcio’s resignation today, those proceedings cannot now take place and I propose to publish our investigation report detailing our findings, in the next few days.”
The inquiry also heard that Fedorcio invited people from leading PR firms Bell Pottinger and Hanover to submit rival bids for the contract that was awarded to Wallis.
Chairman Lord Justice Leveson suggested that the Met head of public affairs chose these companies because he knew they would be more expensive than the former News of the World executive, adding: "The point is, this is set up to get a result."
Fedorcio denied this, but admitted that he had initially wanted to award the contract to Wallis without any competition.
Fedorcio said he only became aware that Mr Wallis was of interest to Scotland Yard over phone-hacking on the day of his arrest on 14 July last year.
Recently it was revealed that Fedorcio let a News of the World journalist use his computer to file a story about a controversial senior policeman.
The paper's crime editor Lucy Panton wrote and emailed an article about former Metropolitan Police commander Ali Dizaei, who was jailed for corruption in 2010, from Fedorcio's office.
In a statement Fedorcio, the Met's head of public affairs, told the Leveson press standards inquiry that he was nearby while Panton was using his computer and she did not have access to any of his files or documents.
He said in a written statement: "She was being chased by telephone and/or text by her office to file this story, which they were expecting from her."