His resignation will trigger a by-election for his seat in the Vincent ward.
After previously saying he would not resign, Mr McKenzie issued a statement this afternoon announcing his decision to step down.
‘‘The online destructive, misinformation and hatred has become a too higher [sic] price to pay, for my children, my wife, and my physical and mental wellbeing.
"I am disappointed, I am forced to put our wellbeing ahead of the communities [sic] need.
‘‘Therefore, I resign/withdraw from the council election with immediate effect.’’
Mr McKenzie won a seat around the council table on Saturday but the following day was accused on social media of financial misconduct during his time as a council contractor.
The post - by Rachel Kerr, widow of former council property and facilities manager Mike Kerr - alleged Mr McKenzie altered contractors’ invoices for personal gain.
It has drawn hundreds of reactions and calls for him to stand down
On Monday Mr McKenzie said he would not stand down and the posts misrepresented a 2018 dispute with the council and stemmed from " a vengefully [sic] response to a fractured friendship rather than any reflection on my professional performance”.
He acknowledged making mistakes and said he had repaid the council $1000 at the time, but maintained fault lay on both sides.
Earlier in the day Central Otago Mayor Tamah Alley said she had met with Mr McKenzie on Monday and asked him whether he thought the accusations would make his stay untenable.
‘‘He did not agree and had suggested to me that he will be remaining in the seat.
"The mayor has no ability to remove an elected member and neither does the council.’’
In a statement this afternoon Ms Alley said if Mr McKenzie was confirmed as a councillor in the official results, his resignation would take effect immediately.
"We anticipate official results by the end of this week. This will trigger a by-election for the Vincent ward, expected to be held in the next few months.
"While this will incur additional costs for ratepayers, I believe it is the best outcome to ensure our community’s full confidence in the integrity of their council over the next three years."
