In a brief statement, Lay, who resigned as Enron chairman and chief executive officer on Jan. 23, said he was leaving the board immediately because his involvement with Enron amid all the investigations was becoming a distraction in efforts to save the company.
"I want to see Enron survive and successfully emerge from reorganization," he said. "Due to the multiple inquiries and investigations, some of which are focused on me personally, I believe that my involvement has become a distraction to achieving this goal.
"My concern is for current and former Enron employees and other stakeholders, and I feel it is in their best interest for me to step down from the board."
Enron filed for Chapter 11 protection Dec. 2 in the nation's largest bankruptcy, putting more than 4,000 of its employees out on the street. The workers lost thousands of dollars of savings in the company's 401(k) retirement plan.
Lay was expected to appear Monday before a Senate Commerce subcommittee, but Sunday his lawyer informed the panel that he would not testify. There were reports late Monday that he would be subpoenaed to answer questions.
In a letter, Lay's lawyer, Earl Silbert, apologized for his client but said the former Enron chairman could "not be expected to participate in a proceeding in which conclusions have been reached before Mr. Lay has been given an opportunity to be heard."
An internal report filed Saturday with the New York bankruptcy court had also been critical of Enron upper management, including Lay. The 218-page report also alleged that Enron's auditor, Arthur Andersen, ignored auditing standards.
The Enron board has hired Stephen Cooper, the managing partner of Zolfo Cooper, LLC, to turn around the energy company. Cooper took over as interim CEO and restructuring officer at Enron's Houston headquarters last week.