Government spokesman Gholam Hossein Elham, said Saeed Jalili, a little-known deputy foreign minister for European and American affairs, was to succeed Ali Larijani as lead negotiator effective immediately.
Larijani in many cases held a hardline view on the nuclear standoff between Iran and the West but was also considered to be a more moderate figure than Ahmadinejad within Iran's hardline camp. He was seen as more committed to a diplomatic solution over Iran's nuclear program while Ahmadinejad is seen as not favoring talks with the West.
Larijani's resignation was interpreted by many here as giving Ahmadinejad a free hand in dictating his views to the less experienced Jalili.
Elham did not give a specific reason for Larijani's resignation other than to say he wanted to focus on "other political activities."
"Larijani had resigned repeatedly. Finally, the president accepted his resignation," Elham told reporters.
The United States and some of its allies accuse Iran of secretly trying to develop nuclear weapons. Iran denies the claim, saying its program is for peaceful purposes including generating electricity.
Elham stressed that Iran's nuclear policy would not change because of Larijani's resignation.
"Iran's nuclear policies are stabilized and unchangeable. Managerial change won't bring any changes in (those) policies," Elham said.
The spokesman said a meeting between the nuclear negotiator and the European Union foreign policy chief, Javier Solana, scheduled for Tuesday in Rome would still take place.
"Despite Larijani's resignation, meetings ... won't change. Larijani's successor will meet Solana instead," Elham said.
Ahmadinejad was elected president in 2005 and appointed Larijani, a former Revolutionary Guards Corps commander and a close ally of supreme leader Ayatollah Ali Khamenei, to replace Hasan Rowhani, considered a moderate politician. Ahmadinejad had accused Rowhani and his team of technocrats as weak and giving too many concessions in nuclear talks with European nations.
After Larijani was appointed, Iran took a more defiant approach to its nuclear program. It resumed uranium enrichment activities, leading to its referral to the U.N. Security Council by the International Atomic Energy Agency in 2006. Iran's refusal to halt enrichment subsequently prompted a resolution by the U.N. Security Council imposing sanctions on Iran in December 2006 and another resolution widening the sanctions in March.
In 2006, Larijani rejected Western economic incentives in return for a suspension of Iran's nuclear activities, saying the Security Council "should not think that they can make us happy with candies."
However, differences between Larijani and Ahmadinejad were revealed earlier this year when Larijani became upset after the president contradicted him on whether Iran would attend a meeting in Egypt to discuss Iraq. Larijani traveled to Baghdad in May to discuss Iran's conditions for attending the meeting but was upset after a reporter at the Baghdad airport said Ahmadinejad had already confirmed that Iran would attend.
Larijani's absence during Russian President Vladimir Putin's meeting with Khamenei, last week further raised eyebrows in Iran's political circles.
Before he was appointed, Larijani was the head of Iran's state-run radio and television network and was seen as one of the hard-liners' most effective weapon in curtailing former President Mohammad Khatami's reform program. At the time, Larijani used the official media as a weapon to suppress democratic reforms and prohibited the broadcast of information that might have been harmful to hardline clerics.