Announcing his decision with “great sadness”, the MP claimed in a letter to his constituents that he had “not been listened to or been given a fair investigation” after being suspended by the party.
And he added: “I am of the opinion that the Labour Party no longer shares my commitment to the true definition of equality and compassion.”
Mr O’Mara wrote: “I would be lying to those of you whom I represent, and those close to me like my parents and sister respectively, if I continued under the pretence that I feel there is a place of acceptance and empathy for me as a working class, underprivileged disabled man within the Labour Party.
“I have experienced little to make me feel welcome, understood and accepted during this last year.”
The 36-year-old, who has yet to make his maiden speech in Parliament, was readmitted to the party earlier this month after receiving a formal warning for the comments he made in his early 20s.
Earlier this week in an apologetic statement issued through the party, he explained how he grew up “in an era when lad culture and prejudicial language were normalised”.
Labour’s national executive committee disputes panel ruled earlier this month that the case did not meet the threshold required to be referred for expulsion but that he should undergo mandatory training.
Mr O’Mara’s shock victory over the former deputy prime minister and leader of the Lib Dems, Nick Clegg, was one of the most memorable moments of the 2017 general election.
A Labour Party spokesman said: “We’re disappointed Jared has decided to resign from Labour after we won the Sheffield Hallam seat from Nick Clegg and the Lib Dems last year. We wish him well for the future.”
In his letter, Mr O’Mara suggested he will not step down as an MP, saying “I might be leaving Labour but I am still at your side”, and offering constituents help with casework.
Describing himself as “the first autistic MP in our history”, he wrote: “I didn’t commit any crimes, yet I have been made unfairly to feel like a criminal.
“Nobody should be made to feel ashamed for mistakes they make when they are young.”