The film, titled Roh's Sweetness, had already been in cinemas for over a week. It tells the story of a married woman whose husband is abroad and lives with a relative in a poor neighbourhood where she becomes an object of desire and sexual obsession for men.
Ahmed Awad, undersecretary to the culture minister and head of the censorship authority, said that he had submitted his resignation on Thursday morning in response to Prime Minister Ibrahim Mahlab's decision to stop the film being shown.
The censorship board is meant to be an independent body that gives the final say on whether a movie can be seen by Egyptian audiences.
"Of course I'm not happy with what happened," Awad said. "I did this out of respect for myself."
Awad said he had yet to receive a response to his resignation from the government.
Mahlab said he stopped the film being shown in response to calls from the National Council for Motherhood and Childhood and "to preserve the morals of our children".
Lebanese sex symbol Haifa Wehbe plays the lead character in the film and has a young boy infatuated with her. Her character is also raped in the film. Mahlab convened a meeting of prominent artists on Saturday, but did not change his position on the film.
In a statement, Mahlab said the government continued to value the fine arts and creativity in all its forms, "but there is a difference between art and the infringement upon values".
In a column in Saturday's edition of the independent newspaper al-Shorouq, film critic Kamal Ramzy wrote that the prime minister's concern was misplaced given the many economic and social issues Egypt was facing.