Citing a source it identified only as a member of the General National Congress, the BBC said Youssef al-Mangoush submitted his resignation during a closed-door session of the body.
Mangoush was seen as responsible for much of the country's conflict with the armed militias, which protesters Saturday complained had been given special status by the government.
Militia members said they were operating under defense ministry approval.
About 200 protesters gathered outside the Libya Shield headquarters Saturday, demanding the group vacate the premises, The New York Times reported.
The conflict started when a family claimed they owned the building and demanded the militia leave.
Madia el-Fakhery, a doctor at a Benghazi hospital, told the Times the facility had run out of space for the injured and people were lying on the floor.
"We're seeing gunshot wounds to the chest, head and abdomen," she said. "We've done amputations."
Some injuries appeared to have been caused by explosions, she added.
Mangoush's resignation Sunday came as part of a larger decree declaring three days of mourning for Saturday's deaths, and establishing an investigation into the militias, the BBC reported.