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Earlier, Guterres' office said it was placing Krahenbuhl on administrative leave after preliminary findings of a report by the UN internal oversight team had found "managerial issues that need to be addressed," though Krahenbuhl was cleared of "fraud or misappropriation of operational funds."
Guterres had decided to temporarily replace Krahenbuhl "while those issues are further clarified."
"The fact that Mr Krahenbuhl has resigned impacts whatever decisions the secretary general will have made, but the content of the report will be studied and will be studied very carefully," UN spokesman Stephane Dujarric told reporters in New York.
The report looked into allegations made in a confidential internal ethics document from UNRWA, first reported on by Al Jazeera News in July, which accused Krahenbuhl and other top officials of "abuses of authority for personal gain, to suppress legitimate dissent and to otherwise achieve their personal objectives."
Among the claims in the ethics report, which cited accounts from UNRWA staff, was that Krahenbuhl, 53, started a relationship with senior adviser Maria Mohammedi that "went beyond the professional" and created a "toxic environment."
Krahenbuhl denied the allegations on Wednesday. Speaking on the television channel RTS following his resignation, he said UNRWA had been subject to political, financial and personal attacks. He added that in his 20 years of humanitarian work, he had never been criticized as harshly as by US diplomats during a briefing to the Security Council.
Guterres has designated Christian Saunders to replace Krahenbuhl. The Briton has been tasked with strengthening the agency's management, "particularly in the areas of oversight and accountability."
Saunders had been serving as deputy commissioner general since August, when his "rapid appointment" was announced with the departure of his predecessor, Sandra Mitchell. That same month, UNRWA said it was aware of media reports citing allegations against senior officials and that it was fully cooperating with UN investigations.
The allegations came amid a funding crisis for the agency after the United States said it would discontinue its support in 2018. Last year, the US contributed only 60 million dollars to the programme; the year before that, it was 360 million dollars.
Belgium, Switzerland and the Netherlands separately put payments to the agency on hold over the management issues.
UNRWA, the United Nations Relief and Works Agency for Palestine Refugees in the Near East, operates in Jordan, the West Bank, Gaza, Lebanon and Syria. Krahenbuhl, as Swiss national, had been its head since March 2014.
"The stepping aside of Krahenbuhl is but the first step in a long process that is needed to eliminate corruption, increase transparency and prevent politicization of the agency," said the Israeli Foreign Ministry, calling for the full release of the probe's results.
"These findings strengthen Israel's claims that deep and comprehensive change in the operational model of the agency is required," the ministry added in a statement.
Israeli Prime Minister Benjamin Netanyahu, as well as other Israeli leaders, has called for the dismantling of UNRWA. He criticizes the existence of a refugee agency specifically for Palestinians and says that it "perpetuates the problem of the Palestinian refugees."
UNRWA's operations include running 700 schools attended by half a million children, health centres that receive 8.5 million visits every year, and social and emergency work in the affected areas.
Guterres on Wednesday urged the international community to "remain committed to UNRWA" and its work, "which is a source of stability in a volatile region."
But diplomats told dpa they fear the controversy over Krahenbuhl's resignation will strengthen some states in their criticism of the agency as the expected renewal of its mandate by the General Assembly in December approaches.
The US payment freeze came after President Donald Trump said the US received "no appreciation or respect" from the Palestinians for its contributions, and he decided to officially recognize Jerusalem as the capital of Israel, further angering many Palestinians.
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