The Football Association has accepted the resignation of the former Chelsea player following a disagreement between himself and ex-Charlton defender Richard RufusFootball Association ambassador Paul Elliott has resigned from all of his roles representing the organisation.
This move comes after allegations that Elliott made "discriminatory and abusive" comments to business colleague Richard Rufus via text message.
The 48-year old Elliott, who formerly played as a defender for both Chelsea and Celtic, has also left his post at anti-discrimination body Kick It Out.
FA chairman David Bernstein said in a statement that Elliott's position had become untenable after the matter had been made public.
"I wish to thank Paul for his dedicated and unstinting work, particularly in the area of anti-racism," Bernstein told the FA's official website.
"I am saddened by this turn of events and it is with regret that we accept Paul's resignation. However, the use of discriminatory language is unacceptable regardless of its context."
Elliott released his own statement, explaining his actions, via Kick It Out.
He said: "Earlier this week, a former friend and business colleague made public an SMS text message I sent him, in which I used a term which is widely known as being derogatory to my own community.
"I regret using it; it is inappropriate and not part of my everyday vocabulary.
"As an advocate of high standards of public behaviour, and integrity in public life, I know the use of this word sends out mixed messages and contradicts my position as a Kick It Out trustee.
"I will continue to be active in other projects in what I believe to be a true and just cause."
Earlier in February, Elliott became the first black footballer to collect a CBE for services to equality and diversity in football.
After his playing career was cut short by injury in 1992, he moved into a career in media and football administration, and has been a trustee of Kick It Out since 1996.