Devin Nunes is now himself under investigation by the House Ethics Committee.
The panel is looking into claims that the Republican disclosed classified intelligence.
Devin Nunes called the charges “entirely false” and “politically motivated”.
Representative Mike Conaway will take control of the Russia investigation.
Devin Nunes said his decision came after “several leftwing activist groups have filed accusations against me with the Office of Congressional Ethics”.
The republican added he would continue to fulfill his other responsibilities as chairman and has requested to speak to the Ethics Committee “in order to expedite the dismissal of these false claims”.
Democrats have criticized Devin Nunes for his handling of the inquiry, which is also looking at possible links between the Trump campaign and Moscow.
House Speaker Paul Ryan said he fully supported Devin Nunes’ decision.
Paul Ryan said he trusts Devin Nunes, describing him as “eager to demonstrate to the Ethics Committee that he has followed all proper guidelines and laws”.
However, he added that the inquiry “would be a distraction” for the House Intelligence Committee’s investigation.
Representative Adam Schiff, a ranking Democrat on the House Intelligence Committee, said he respected Devin Nunes’ decision.
Adam Schiff said in a statement the move was a “fresh opportunity to move forward in the unified and non-partisan way that an investigation of this seriousness demands”.
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