The Derby North MP, who served as shadow fire minister, promised to continue to “loyally support” Mr Corbyn as he announced his surprise decision to return to Labour’s backbenches.
He said: “I will be standing down from my role with immediate effect so that I can return to the backbenches, where I will be campaigning on a broader range of issues.
“I will continue to loyally support the leadership of Jeremy Corbyn from the backbenches and hope to be a voice for the party’s members.”
In a longer statement posted on his website, Mr Williamson said he had quit to “bring me closer to the membership of our party”.
But he added he has “every confidence that Jeremy Corbyn’s Labour Party is going in the right direction”.
Mr Williamson, a staunch supporter of both the Labour leader and left-wing group Momentum, recently suggested doubling council tax on highest-value homes to boost councils’ coffers.
Both he and a party spokesman insisted the proposal was not Labour policy, with Mr Williamson telling the Huffington Post: “This is not Labour party policy, it’s an idea I came up with at a local level and it’s got a little bit of traction in other parts of the country.
“It’s a reaction to an emergency that local government has been placed in.”
The MP’s comments were immediately attacked by the Conservative Party.
Responding to Mr Williamson’s resignation, Mr Corbyn said: “I am grateful for Chris’ work on the frontbench, particularly on fire safety following the appalling Grenfell Tower fire.
“I know that on the backbenches, Chris will be a strong campaigner on a range of crucial issues as well as serving his constituents with dedication.”
Brandon Lewis MP, the new Conservative Party chairman, said: “Chris Williamson may have gone, but it remains Labour policy to hike council taxes massively.
“The only reason Chris Williamson has been forced out is because he exposed Labour’s plans for soaring increases in council tax, and his plans have been endorsed by Labour activists across the country.
“A Labour government always means more debt, higher taxes and fewer jobs, and it is ordinary working people who end up paying the price.”