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(BBC)---Patrick Stefanini said his resignation will take effect on Sunday night.
Earlier, the Union of Democrats and Independents (UDI) called on Mr Fillon's Republican Party to choose another candidate in the wake of a scandal over payments.
It is alleged his wife and children were paid for parliamentary work they never carried out.
Details of his campaign chief's departure emerged when the French newspaper Journal du Dimanche published Mr Stefanini's resignation letter.
In it, he gave two reasons - writing that he had advised Mr Fillon to cease his campaign after an investigation began into his financial affairs.
After Mr Fillon decided to continue, he found himself in a minority in his political team, he wrote, and "no longer in the best position to lead your campaign".
The other reason, he wrote, was that Mr Fillon could no longer be certain of not being eliminated in the first round of voting.
Mr Fillon has already lost several key members of his campaign team, and several MPs from his own party are campaigning to replace him with Alain Juppe.
Mr Juppe lost the November primary election to Mr Fillon.
But despite the increasing pressure, Mr Fillon, 62, denies any wrongdoing and says he is the victim of a "political assassination".
The loss of support from the UDI represents a major challenge for his campaign.
The BBC's Paris correspondent, Hugh Schofield, said that while the UDI is a small party with 28 MPs, its alliance with the Republicans is important.
As a centrist party, it broadens the Republicans' base, he said.
UDI leader Jean-Christophe Lagarde said Mr Fillon had become a liability, and that as long as he was a candidate, the centre-right was heading for certain failure.
Separately, National Front candidate Marine Le Pen has refused to attend a summons over misuse of EU funds.
Her legal advisers said she would not attend before the election. "Of course she won't go," her lawyer told reporters.
Ms Le Pen's party is accused of misusing more than €300,000 (£257,000; $321,000) of European Parliament funding.
As a Member of the European Parliament (MEP), Ms Le Pen is immune to prosecution during sessions of the parliament - a measure designed to ensure the independence of members and protect them from pressure in form of legal threats.
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The European Parliament can vote to lift Ms Le Pen's immunity - as they did on Thursday regarding her use of images of violence carried out by so-called Islamic State.
However, the parliament would have to carry out the same procedure again to lift her immunity on the EU funds investigation.
She has also refused a police interview on the topic on the same grounds.
The legal issues surrounding both candidates have lifted the prospects of a third contender - centrist Emmanuel Macron.
On Friday, a poll showed Mr Macron finishing ahead of Marine Le Pen in the first round for the first time - though the pair remain close in popularity.
The election takes place in two rounds in April and May. If no candidate achieves a majority in April, a run-off election will take place between the top two the following month.
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