His resignation comes less than a month after Arthritis Care members narrowly failed to oust the entire trustee board at an emergency meeting.
Of the votes cast, 74.7 per cent were in favour of removing the board, but charity rules required 75 per cent support to enable the no-confidence motion to be carried forward.
Members did succeed in throwing out controversial plans to change the charity's branch structure, which would have expelled branches that did not fundraise, campaign or provide information.
A spokesman for Arthritis Care denied that Butler's resignation had anything to do with the members' ballot.
However, member activist Liz Kwantes of Arthritis Care Grassroots, which has led the opposition to the board's restructuring plans, claimed it must have been a factor in his decision.
"I'm sure the absolute turmoil there has been around the charity over the past few months has something to do with it. He didn't know where to turn in the end," she said.
An acting chief executive will be appointed to lead the organisation from January onwards. The board say they hope to appoint a permanent replacement before Easter next year.
Kwantes added: "My feeling is that they should get in a company doctor to sort out the financial mess. The charity is crumbling at the moment."
Butler will join drug and alcohol charity Addaction in January as chief operating officer.
He will manage the delivery of the charity's 73 services under chief executive Peter Martin.