"After 25 years in public service, I am leaving public life," the 70-year-old mayor told a phalanx of reporters at city hall.
Tremblay denied having knowledge of any illegal cash flowing into his Union Montreal party, The (Montreal) Gazette reported.
Tremblay said he had heard rumors of "brown envelopes" of cash appearing in city departments when he first took office in 2001, but had "put [his] trust in municipal public servants," the Canadian Broadcasting Corp. reported.
He said when he learned of wrongdoing, he took action to stop it, but added the situation had reached a point where he "cannot help in these circumstances."
"The city's functioning is much more important than my own personal interest," he said.
The Gazette said Tremblay had been pressured by Quebec Premier Pauline Marois and others to leave after a former Union Montreal political organizer told an investigatory commission looking into potential corruption in the management of public construction contracts that Tremblay was aware of illegal cash contributions to the party and told his party staff not to provide him any details.