The company said Chief Operating Officer Steve Ritchie will succeed Schnatter, who is also the chairman of the board.
The comments drew praise from white supremacists and the company apologized two weeks later.
It's not clear if Schnatter's resignation is directly related to his comments about the NFL.
Prior to backlash for his comments on the NFL, Schnatter has a history of statements that have sparked political controversy.
More on this as it develops.
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But we what we do know is that back in November, Schnatter said Papa John's was "disappointed that the National Football League and its leadership did not resolve the ongoing situation to the satisfaction of all parties long ago".
"This should have been nipped in the bud a year and a half ago", Schnatter said on a conference call with investors in November.
The Papa John of Papa John's is stepping down as CEO of the pizza chain effective January 1, CNN reports. "We do not want these individuals or groups to buy our pizza", the company said following the post on Papa John's being the official pizza of the alt-right.
This is not the first time that Schnatter has stepped down as CEO.
What made this more puzzling was that Papa John's third-quarter sales were pretty much in line during the hard period. He took a break from being CEO between 2005 and 2008. The CEO announcement was made after the market has closed.
This likely won't make Dallas Cowboys owner Jerry Jones too happy, who backed Papa John's statement. "We couldn't have a more proven leader to guide Papa John's through its next stage of growth".