Mr. Habibzai issued a statement online on Tuesday night and said his resignation has been approved by the President.
He did not elaborate further regarding the circumstances surrounding his decision to step down as Kabul Mayor.
However, he thanked his team and colleagues and said several projects have been implemented in Kabul while a number of others are still being implemented which would change the view of the city.
In the meantime, unconfirmed reports indicate that the Kabul Mayor has been fired by President Mohammad Ashraf Ghani.
The Office of the President, ARG Palace, yet to comment regarding the resignation of Mr. Habibzai.
This comes as a number of senior and prominent government officials have stepped down from their positions during the recent months.
The National Security Adviser Mohamamd Hanif on Saturday announced his resignation citing serious differences o the political level.
The Ministry of Finance Iklil Hakimi and the Minister of Urban Development and Housing Syed Sadat Mnansoor Naderi had also resigned from their positions few months back.