Shaharyar said the Younis Khan episode, which followed the Oval Test controversy in England in August, had contributed to his decision.
''These two incidents were very upsetting for me and spoiled an otherwise productive period for me. My tenure was until Dec. 2006 so I decided to go now,'' Shaharyar told Reuters.
''Since the World Cup is just five months away I wanted to give time to the new chairman to adjust before the tournament.'' A PCB official told Reuters that Shaharyar's resignation, submitted two days ago, was accepted by the chief patron of the board, Pakistan President Pervez Musharraf.
''The new chairman will be announced on Saturday but the indications are it will be Dr Naseem Ashraf, a member of the board's ad-hoc committee,'' said director of cricket operations Saleem Altaf.
Former foreign secretary Shaharyar had been chairman since December 2003.
Pakistan are facing a compensation claim from the England and Wales Cricket Board (ECB) for more than 800,000 pounds ($1.51 million) in lost revenue, Altaf said.
Visiting captain Inzamam-ul-Haq and his team, angry the umpires had penalised them five runs for alleged ball-tampering, refused to carry on playing in the fourth test at the Oval.
Although Inzamam was subsequently cleared of ball-tampering charges, he was banned for four one-day matches by the International Cricket Board for bringing the game into disrepute.
''I don't think the Oval incident should have happened. But once it did we had to take a stand and back our players,'' Shaharyar said.
Younis was named skipper in Inzamam's place for the Champions Trophy but withdrew yesterday, saying he did not want to be a 'dummy captain'.
The board then appointed Mohammad Yousuf as skipper for the Champions Trophy.
Pakistan cricket has been run on an ad-hoc basis since 1999 and is directly answerable to the President, who appoints the board chairman and other leading officials.