The 51-year-old cited family and health reasons, as well as recent poor results for his decision.
"In essence, I need to reduce my responsibilities and look after myself better than I am at present," he told Annan's website.
"The only way I can do this is to resign from my post at the club."
“At the moment, I am exhausted and need to recharge my batteries”Cairney and 10 first-team players had their arrival at Ibrox for their Division Three game against Rangers delayed by a broken down team bus on Tuesday.
And the part-timers' 3-0 defeat by the league leaders - Annan's fifth straight loss - proved to be his final game in charge.
''It is with much sadness but with no regrets that I have decided to resign from my post as manager of Annan Athletic Football Club," said Cairney, who had a previous one-year spell as Annan boss.
"In recent times, and I don't just mean the last month, I have found it very difficult to manage the time I spend with my family, my job and carrying out my duties as Annan Athletic manager.
"As a result I find it very difficult to switch off and relax and this has had a negative effect on my general health and well-being.
"The recent run of bad results has not made this any easier and I find myself worrying about football matters when I should be focusing on other areas of my life.
"At the moment, I am exhausted and need to recharge my batteries."
Cairney first took charge of Annan when they were in the East of Scotland League and has been manager since they were elected to the Scottish Football League in 2008.
They lost in a promotion play-off final to Albion Rovers in 2011 and Cairney also led them to two Challenge Cup semi-finals.
However, they have slipped down to eighth place in Division Three this season.
"As you know, results usually change for the good when a manager departs a club and I am sure this will also be the case at Annan Athletic," Cairney added.
The club have yet to make a statement about the departure. Assistant manager Euan Brydson will take charge of the team for this weekend's match away to East Stirlingshire
Source: Lichties Mad