In a letter, DWP General Manager Ron Nichols told the mayor and other city leaders that the decision to step down was for "personal reasons."
"My decision to leave is my own and for personal reasons...I have not yet made any specific plans for a future leadership role in the industry elsewhere," said Nichols.
Nichols served for three years and will leave at the end of January. He says he felt it was important to stay through the new administration's transition.
Garcetti thanked Nichols and said he is "focused on continuing to reform the DWP to cut costs, improve customer service and increase transparency."
Nichols' resignation comes amid two debacles within the DWP. There has been intense scrutiny into two DWP trusts that received more than $40 million in ratepayer money. Nichols, who sits on the boards of those trusts, was unable to provide financial documents city leaders requested to determine how the money was used.
He also oversaw a troubled overhaul of DWP's 39-year-old billing system that sent as many as 70,000 customers late or inaccurate bills recently.
City News Service contributed to this report.