His departure comes shortly after he surprised many by not taking a ministerial position in Norway's new government, despite being one of the most powerful figures in his party.
As he announced his resignation, Sandberg stressed that he had left of his own accord, and that he had not, as some suspect, been ousted as part of a cleansing of the party's more extreme elements by its leader, and Norway's finance minister Siv Jensen.
"I refute strongly that Jensen has played any role into this. The reality is that I've felt very supported by Siv," He said. "I can not find the motivation to work for what I believe in."
Jensen said she had "respect" for Sandberg's decision: "I know it has been a difficult decision for him. I am also glad that he stresses that he will continue to work for the party from parliament. "
Sandberg has been one of the Progress Party's most effective campaigners, securing grass root support with his outspoken criticism of Norway's immigration regime.
He announced in autumn that he was writing a political memoir, which will come out in November.