Joseph Yun, special representative for North Korean policy and regarded as a tireless negotiator, informed the State Department of his decision, and Secretary of State Rex Tillerson "reluctantly accepted" the resignation, State spokeswoman Heather Nauert said in a statement.
"He was skeptical and wary of the White House's hardline approach toward North Korea from the beginning", a senior South Korean official told Reuters, requesting anonymity due to the sensitivity of the matter.
Some East Asia analysts have called Mr Yun's departure a big blow to attempts to use diplomacy to resolve the crisis over North Korea's development of nuclear missiles capable of hitting the United States, which has raised fears of war.
The paper also criticized the US for creating the impression the North was "begging for talks" and giving into pressure and sanctions imposed on the regime. "It's problems of engagement that have been hard".
In June previous year, he flew to Pyongyang to negotiate the release of Otto Warmbier, an American college student who had been detained there for stealing a propaganda poster. Warmbier died days after his repatriation.
North Korea told a United Nations (UN) disarmament forum on Tuesday that sanctions over its nuclear programme would "never work", as it voiced further defiance against President Donald Trump's "maximum pressure" campaign.
Yun has chose to retire for "personal reasons", said department spokeswoman Heather Nauert.
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But that would appear little more than a formality, with the congress having never voted down a proposal from party leaders. The proposal must be approved in March by the country's parliament, though its expected to meet no resistance.
"It's regrettable that Yun is leaving at this critical moment".
A combination photo shows U.S. President Donald Trump in NY, U.S. September 21, 2017 and North Korean leader Kim Jong Un in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang, September 4, 2017.
His departure comes amid glimmers of hope for a diplomatic opening between Pyongyang and Washington.
Lee was specifically referring to a meeting Vice President Pence was scheduled to have during his visit to the Games, which was abruptly cancelled by the North Koreans.
"So they want to talk, first time", Trump said. "Joe Yun is the only senior official left at State who has experience dealing with the complexities of North Korea policy".
"I don't see any kind of policy that will achieve the desired result, a non-nuclear North Korea", Lankov concluded. On Monday, Trump responded to the North's reported overture by saying talks will happen only "under the right conditions".