"I would like to thank you warmly for everything you have done over the past two years as Secretary of State to shape our departure from the European Union", she said.
In a move that unnerved Conservative Party eurosceptics, Steve Baker, a minister who worked for Davis, also quit, saying in his letter to May: "I can not support this policy with the sincerity and resolve which will be necessary".
He became the public face of Brexit, leading the British delegation in talks with Brussels, although his role had been increasingly overshadowed in recent months as May and her aides took a bigger role in the negotiating strategy.
The plan would see the United Kingdom sticking to European Union regulations in return for a free-trade deal with the bloc.
Opposition Labour leader Jeremy Corbyn said his departure showed May had not authority left and was "incapable of delivering Brexit".
During a 12-hour meeting on Friday, May's fractious cabinet - including Davis - finally agreed on a plan for future trade ties with the EU.
But her spokesman signaled on Monday she would not back down over the "business friendly" agreement, saying May would now focus on moving the Brexit negotiations forward - a step European Union officials and businesses have long called for.
It is unclear whether Brussels will accept this, after repeatedly warning Britain it can not "cherry-pick" bits of its single market.
Trade war begins between China, US as tariffs kick in
So Trump should push, but he can't go too far, because at the end of the day, it's the American consumer who's going to get hurt the most.
Some euroskeptic lawmakers dream of replacing May with a staunch Brexiteer, such as Foreign Secretary Boris Johnson, who in the past has disagreed publicly with his boss.
Tory Brexiteers have voiced concern about the agreement, with the chairman of the campaign group, Leave Means Leave, accusing May of personally deceiving Brexit campaigners.
From there, he took a higher degree in business at the London Business School, attending the advanced management programme at elite USA university Harvard while pursuing a career on the board of sugar giant Tate and Lyle.
Davis also served as a reservist in the Special Air Service, the British army's elite special force unit.
Noted for his love of climbing and flying, his ascent in politics began in 1987 when he was elected to parliament, representing a seat in northern England.
- May leads a minority government which has only a slim majority in parliament thanks to a deal with a smaller party.
But Davis had expressed his unease over a compromise plan right up until the eve of the meeting, writing a letter to May describing her proposal to ease trade and give Britain more freedom to set tariffs as "unworkable".
It won the backing of one other prominent Brexit campaigner. When the Conservatives returned to power in 2010, he spent his time on the backbenches campaigning on civil liberties issues.
In a resignation letter circulated by local reporters, Davis told May he has repeatedly disagreed with the government over the a year ago and that it is looking "less and less likely" that the government can deliver Brexit per voters' wishes.
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