A member of the powerful Nehru family that has dominated Indian politics for decades, Gandhi also resigned as the leader of the national advisory council, reports the Financial Times.
The moves came as opposition parties began accusing the Congress-led government of subverting the constitution to protect Gandhi and others from being expelled from Parliament for holding so-called "offices of profit."
Gandhi, daughter-in-law of the late Prime Minister Indira Gandhi, will continue as leader of the Congress Party which ruled the country through a coalition. She plans to stand for election to her seat in the lower house of Parliament.
"Mrs. Gandhi was caught red-handed trying to subvert the constitution and the Parliament," said an opposition party spokesman. "She became a victim of her own conspiracy. This grandstanding will not do."