Officials said Ranatunga, 42, sent his letter of resignation to President Mahinda Rajapakse giving up his political office to enter Sri Lanka Cricket (SLC), the main body governing the sport in the country.
"He has sent the letter of resignation to the President and will hold a media conference tomorrow (Friday) to explain his stand," an official close to Ranatunga said.
Ranatunga on Wednesday slammed the sports ministry for the delay in naming a committee to oversee cricket in the country.
The president last week, on the request of Ranatunga and other former players, ordered that elections to the deeply divided Sri Lanka Cricket (SLC) be cancelled.
Rajapaske also asked sports minister Jeevan Kumaratunga to name a panel to replace the SLC's interim committee and bring in ex-players like Ranatunga to administer the sport.
The sports minister, however, put off appointing a new committee and asked the existing panel under Jayantha Dharmadasa to continue for an indefinite period.
Ranatunga, who became a cult figure here after leading Sri Lanka to victory in the 1996 World Cup, said the government was going back on its promise to constitute a new committee.
Local media said Kumaratunga had delayed naming a new panel because he wanted his own appointee Dharmadasa to continue in office.
The power struggle in the country's richest sports body rumbled on as South Africa arrived in Colombo on Wednesday to play two Tests and a limited-overs tri-series also featuring India.