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The resignation has also led to a declaration from the small but influential radical reform group Democratic Platform that they would also break away.
The split leaves Soviet leader Mikhail Gorbachev with a party in tatters.
It was thought that Mr Gorbachev had appeased the reformers by ensuring the defeat of hardline conservative Yegor Ligachev in the race for the deputy leadership yesterday.
His favoured candidate, the pro-reform Vladimir Ivashko, was elected instead.
But it was not enough. Within hours of another vote to approve new party rules which still restrict factions operating within it, Mr Yeltsin stood up to address a hushed auditorium.
"In view of my great responsibility towards the people of Russia and in connection with the move towards a multi-party system I cannot fulfil only the instructions of the party," he said.
"As the highest elected figure in the republic, I have to bow to the will of all the people."
He then turned and left the chamber without another word.
Some delegates shouted "Shame", while a few clapped.
Mr Gorbachev, clearly expecting the move, was heard to say, "That ends the process logically," before instructing delegates to withdraw Mr Yeltsin's congress mandate.
The departure of a group of Democratic Platform delegates less than an hour later confirmed the split - the first since the Bolshevik-Menshevik divide which put Lenin in power in 1903.
Among those leaving are the popular new mayor of Leningrad, Anatoly Sobchak, and the mayor of Moscow, Gavriil Popov.
Mr Yeltsin has been a figurehead for radical reform of the party system for the last 18 months, and has been a trenchant critic of President Gorbachev for not going far enough with party reforms.
Despite that, he has remained at the centre of the Communist Party structure. His name was put forward for inclusion in the new Central Committee to be chosen this evening.
His real strength lies in his popular support among ordinary Russian people.
In an opinion poll carried out by the Moscow News newspaper earlier this month he scored an 84% popularity rating, making him by far the most trusted figure on the Soviet political scene.
Days later, tens of thousands of demonstrators gathered beside the walls of the Kremlin to voice their opposition to the Soviet Communist Party.
In August 1991, the rivalry between reformist and conservative elements of the congress erupted in an attempted coup against Mikhail Gorbachev.
Boris Yeltsin became a national hero after he mounted a tank to rally the people against the coup.
After the formal collapse of the Soviet Union later in 1991, Boris Yeltsin, who was already president of Russia, found himself at the head of a world superpower.
His presidency was marked by rapid economic and political reform.
He took on the remnants of Soviet conservatism again in 1993, in an armed clash in which the Parliament building was shelled and 100 people died.
He went on to win the first post-Soviet presidential election in 1996, despite plummeting popularity ratings.
In the same year, he underwent major heart surgery, and there were serious concerns about the state of his health.
Amid growing criticism of his erratic behaviour, including several embarrassing gaffes on the international stage, Yeltsin stood down from the presidency on 1 January 2000.
His chosen successor, Vladimir Putin, won the next election a few months later.
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