Following a year of turmoil at the revered Canberra institution, Ms Bell tendered her resignation to the university council, Chancellor Julie Bishop announced on Thursday.
The former anthropologist was appointed vice-chancellor at the beginning of 2024 and soon after instigated plans for widespread job cuts, as part of a mission to cut $250 million in costs.
Management argued the university's financial situation was unsustainable and widespread change was needed to arrest its slide down the international rankings.
Ms Bell said her resignation was not an easy decision.
"Like the rest of our community, I believe firmly in our delivering on our national mission - to create and transmit knowledge through research and teaching of the highest quality," she said.
"And know that doing this requires a solid financial, cultural and operational foundation.
"Achieving such a foundation has been difficult and this has been a very hard time for our community.
"I am grateful for all the ways that people have shown up and for all the work that has been done and the progress we have made."
In March, hundreds of ANU staff members passed a vote of no confidence in Ms Bishop, a former minister in the previous coalition government.
She was later accused of bullying, which she denied, by ANU demographer Liz Allen during a federal parliamentary hearing.
Student protests spread across campus in August as tensions escalated.
The situation reached a tipping point in September when the deans of the university's six academic colleges told Ms Bishop they had lost confidence in Ms Bell, The Saturday Paper reported.
"Distinguished Professor Bell will be undertaking a period of leave, and will return to the ANU School of Cybernetics in due course," Ms Bishop said in a statement.
"On behalf of the ANU Council, I thank Distinguished Professor Bell for her service as Vice-Chancellor and President of our University."
The resignation was welcomed by the National Tertiary Education Union, which met with Ms Bishop earlier on Thursday morning.
"The announcement of the vice-chancellor's departure must also be accompanied by an announcement that all forced redundancies will now cease," ACT Division Secretary Lachlan Clohesy said.
"Nobody takes delight in the situation of the Australian National University at the moment.
"We welcome this development. But we also need to recognise the incredible toll the last two years have taken on the ANU community, and that will take time to heal."
ACT Senator David Pocock said Ms Bell's leadership had become untenable over recent months.
"While there is broad understanding of the need to put the ANU on a more sustainable financial footing, there have been serious failures of leadership and governance in the implementation of Renew ANU," he said in a statement.
The university remains under investigation by higher education regulator TEQSA over its governance standards.
ANU Provost Rebekah Brown will take the reins as interim vice-chancellor.
