"The seriousness of this information, although it has not been proven, led me to present my resignation," said Esperanza Aguirre, 64, PP head in Madrid and a former education and culture minister under then premier Jose Maria Aznar.
Police on Thursday searched the headquarters of acting Prime Minister Mariano Rajoy's party and industrial group Villar Mir as part of a probe into allegations of irregular funding detailed in documents by a former deputy PP head in Madrid, Francisco Granados.
Aguirre, a countess by marriage, told a hastily-arranged news conference that she had "no culpability, but a political responsibility that I assume by resigning" her party role because she had nominated Granados to his post.
She was questioned Friday in another scandal involving alleged embezzlement by members of the Madrid chapter of the party, whose image has been tarnished by repeated graft scandals during its four years in power, as ordinary Spaniards suffer amid the country's prolonged economic woes.
Aguirre, who served as head of the regional government of Madrid between 2003 and 2012, has not been charged with any misdemeanour but was called to testify at a commission of inquiry created in October by the regional assembly to probe alleged wrong-doing in Madrid.
The leader of new anti-austerity party Podemos, Pablo Iglesias, dubbed her the "countess of corruption", accusing her of having protected top PP officials who are implicated in graft scandals.
PP members are also due to be questioned by a judge over how computer hard drives of r party treasurer Luis Barcenas, who is in jail for embezzlement, were wiped clean before investigators were able to see them.
Corruption has fueled the rise of two new parties, Podemos on the left and market friendly Ciudadanos on the centre-right, and cost the PP votes in December elections which it won but without the absolute majority it got in 2011 polls.
The Popular Party has since failed to put together a coalition government, forcing Rajoy to stand aside and let the Socialist Party seek to form an alternative administration.