Councillor Rajbir Singh, who was elected leader of the crisis-stricken Labour-run authority in May, says he can no longer balance the demands of council leadership with family and business responsibilities.
The council has had five different leaders in less than three years and is mired in scandal.
In a statement Councillor Singh, who represents the Bristnall ward, said: "I regret to announce that I am resigning as leader of Sandwell Council with immediate effect.
“It has been an enormous privilege to lead Sandwell and I am proud of the progress made in transforming the council into one that puts residents first.
“Being leader is also an incredibly time intensive job that requires total dedication.
"After much thought during a family holiday in India, I have come to the conclusion that I cannot continue to balance the heavy demands of council leadership with the responsibilities I also have to my young family and my businesses.
“It has been huge privilege to serve my community at such a young age and one day in the future when my personal circumstances are different, could seek opportunities to serve the community.
“It is in the best interests of residents that I stand aside now so that another councillor can step up to the challenge of leadership.
“I’d like to offer my huge thanks to the residents of Sandwell and colleagues in the council for their support and wish the council every success in the future.”
Deputy leader Councillor Maria Crompton will again take over as interim leader.
Since former leader Darren Cooper died in 2016, the Labour group and council has been led by Steve Eling, Steve Trow, Yvonne Davis, Councillor Crompton and Councillor Singh.
It has faced a variety of challenges, with regular infighting and allegations of corruption, bullying and racism.
Labour lost nine Sandwell seats to the Conservatives in the local elections in May, and gained a further seat at the Tividale by-election in July.
And in October, a report was leaked which cast doubt over the credibility of a corruption inquiry which has hung over the council for five years - making claims of political interference, bias and racism.
In a message to Labour group members, Councillor Crompton said: "I would like to thank Rajbir for his service and leadership over the past six months.
"I will be stepping up to take over the responsibilities of leader to ensure business continuity and building on the foundations of his work as leader.
"It’s important that we continue with ‘business as usual’ and ensure stability in the running of the council following Rajbir's decision to step down for personal reasons."
The leaked review concluded there were "deep concerns" about the "conduct and circumstances" of the two-year Wragge investigation into misconduct by councillors.
As well as having a high turnover of political leaders, Sandwell Council has also struggled to retain chief executives and is currently offering £185,000 in the search for the authority's fourth non-elected boss in three years. Kim Bromley-Derry is the current interim chief executive.