Jean Carriere stepped aside after the photo started to make rounds on social media Wednesday.
The photo is of a half-naked white woman holding up her middle finger with the words "(expletive) Islam."
Carriere told a Radio-Canada journalist he posted the photo because he felt it was pro-feminist.
PQ Leader Pauline Marois confirmed Thursday that Carriere was no longer the party's candidate in the Montreal riding of Lafontaine, a traditional Liberal stronghold.
"Mr. Carriere called us this morning and said he would (withdraw) his candidacy and I accepted this proposal," Marois said.
For his part, Carriere took to his personal Facebook account to blast the media for his hasty departure.
The National Council of Canadian Muslims welcomed his resignation and called the posting "deeply offensive" to all Canadians.
"We are calling upon all of Quebec's leaders and candidates, including Premier Pauline Marois, to clearly denounce bigotry and Islamophobia," Ihsaan Gardeesays, the group's executive-director, said in a statement.
The council describes itself as an independent, non-partisan and non-profit grassroots advocacy organization.
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