He has released a statement says new leadership is required to take the club forward - and to bring the Tigers home.
Dunstan has overseen some of the most challenging times in the club’s history, including when they were made homeless thanks to unforgiving floods of 2007.
The popular chairman says it was a “heartbreaking” decision but one he had to make.
“It is with regret that I informed the club’s owner last week that I am resigning from the position of chairman, coming into effect after the game against Eastbourne Borough to enable me to support Will Morford and the players after a difficult week,” Dunstan said in a statement.
“It has been an honour and a privilege to Chair this fantastic football club, but the time and effort it takes to run this club is far beyond that which is reasonable of volunteers.
"I continue to believe in the future of this club, and the huge potential it has, but it will only realise that potential by bringing in the skills, structure, leadership and investment the club needs and deserves.
“We are playing at a fantastic level, but we are doing so without the infrastructure to support it – that simply cannot continue.
“I have supported the club all my adult life, and worked for it on a voluntary basis for the last 27 years in just about every role – from dressing room cleaner to programme editor to Chairman, and many points in between.
“This has therefore been a heart-breaking decision, but one I must make, and it is now my fervent hope that the club can move forward positively as it prepares to move back into the City. That is something that absolutely must happen within the timescales laid out last week.
“There is a lot of emotion around at the moment, and I am feeling every ounce on it, but we should remember that for all of the problems we have we have also achieved miraculous things under impossible circumstances, and I would urge all supporters of this club to remember that there is a lot to be proud of.
“We have a first team playing at its highest level ever, despite all the odds. We have built a community arm that is doing fabulous work across the City and which will be taken to an even higher level in months to come.”