The popular boss has been in charge at Gander Green Lane since 2008 and is currently on a leave of absence to attend to personal matters.
But the National League club have made the sudden announcement that he will not be returning.
"We are sorry to announce that after eleven years as Sutton United manager Paul Doswell has tendered his resignation with immediate effect," a club statement read.
“Paul had decided to take a break from the role a month ago, intending to return for next season, but he has now decided that he is unable to continue due to the time and distance that is involved in travelling from his home in Winchester, and has made his decision permanent.
"The players were informed after today’s game against Maidstone, and Ian Baird, Micky Stephens and Matt Gray will continue to take charge of the team for Saturday’s last game of the season at Dover.
Club chairman Bruce Elliott said: "How do you begin to pay tribute to Dos’s contribution to Sutton United over the past eleven years?
"We were at a low ebb when he joined us, when if you had said that we would within ten years be playing clubs such as Leyton Orient, Hartlepool and Tranmere as equals you would probably have been laughed at.
"But it has been an unforgettable ride, including two league championships, our highest ever league placing and, of course, an experience in the FA Cup the like of which we have never seen before and may never see again.
"Together with fulfilling his vision of having a pitch where the clubs’ teams could all play, and which could be opened to the community, he leaves the club in a position that was barely conceivable when he took over.
“His enthusiasm and commitment to Sutton United has been remarkable, and he has pulled everyone at the club along with him in his desire to be the best that we can beat our level .
"We are very sad that he has made this decision, but fully understand his reasons for doing so and wish him and his family, which we know is so important to him, every happiness in the future, although we hope we will still see him, and them, at a club where they will always be welcome.”