"The commander of the 8200 unit, (Brigadier General) Yossi Sariel, has informed his commanders and subordinates of his intention to end his position," the army said in a statement.
"The officer will conclude his role in the near future."
The prestigious and secretive Unit 8200 is in charge of decoding and analysing intercepts and other signals intelligence.
In the wake of October 7, Israel's Military Intelligence Directorate was thrown into a crisis that led to its commander, Major General Aharon Haliva, announcing his resignation in April 2024.
The army said then that Haliva had asked to be relieved of his duties for the directorate's failure to foil the October 7 attack.
Israeli media on Thursday broadcast a copy of Sariel's resignation letter in which he asked for "forgiveness" for "not fulfilling the mission we were entrusted with" on October 7.
In June, public broadcaster Kan disclosed the existence of an intelligence brief prepared by Unit 8200 in September 2023 that warned military officials of Hamas's preparations for the attack.
Kan said the Unit 8200 document included details of elite Hamas fighters training for hostage-taking and plans for raids on military positions and Israeli communities in southern Israel.
The October 7 attack resulted in the deaths of more than 1,205 people, mostly civilians, according to an AFP tally based on official Israeli figures.
Included in that count are hostages who were killed in captivity.
Israel's retaliatory offensive against Hamas has killed at least 41,118 people in Gaza, according to the territory's health ministry. The UN rights office says most of the dead are women and children.
Netanyahu has repeatedly refused to open an official inquiry into October 7 until the war in Gaza is over.
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