The star of TV show The Apprentice, who has in the past been amongst Labour’s largest donors, said that the party had been “aware of my disillusionment for some time”.
Lord Sugar said he kept his intentions secret during the election campaign in order not to damage Labour’s chances.
He plans to stay in the House of Lords, having been granted a life peerage under Gordon Brown in 2009.
Lord Sugar served as an “enterprise champion” under Mr Brown’s government and was among Labour’s most prominent supporters.
The electronics and property entrepreneur who lives in Chigwell, Essex, but also has homes in London, Spain and Florida said: “I had made my decision to resign from the party whatever the outcome of the general election” adding that he had lost confidence in the party over the past year and had expressed concern over Labour’s direction to its “most senior figures”.
He said: “In the past year I found myself losing confidence in the party due to their negative business policies and general anti-enterprise concepts they were considering if they were elected. I expressed this to the most senior figures in the party several times.
“I signed on to New Labour in 1997 but more recently, particularly in relation to business, I sensed a policy shift moving back towards what Old Labour stood for.
“By the start of this year I had made my decision to resign from the party whatever the outcome of the general election.”
Lord Sugar added that he was a “loyal person” and decided to keep his intentions quiet during the election campaign.
“I have no wish to stick the boot into the party. There are many good people in Labour working hard every day to serve the public and I wish them all the best of luck. I am grateful for all the experiences being a member of Labour has brought me.
“I intend to continue in the House of Lords, representing the interests of business and enterprise in the UK. I will be making no further comment at this time.”