Davis oversaw implementation of Gov. Scott Walker's plan lifting a cap on Medicaid coverage for about 80,000 people while also removing nearly as many people out of the program.
The state Department of Health Services announced Davis's resignation Wednesday.
The news comes three weeks after the release of 28,000 pages of emails seized during a criminal investigation into Kelly Rindfleisch, who raised money for Davis when he was a Republican candidate for lieutenant governor in 2010.
Rindfleisch was convicted of felony misconduct in office for doing the campaign work while at her government job under then-Milwaukee County Executive Scott Walker.
Davis was not charged with any wrongdoing.