"I resign in contention with the decision to send the marines back to India. The misgivings I expressed had no effect on the decision taken," he told parliament.
"I am resigning because for 40 years I have maintained, and still maintain, that the reputation of the country, the armed forces and Italian diplomacy, should be safeguarded," he said.
The Italian government sent Massimiliano Latorre and Salvatore Girone, accused of shooting dead two fishermen off the coast of Kerala, back to New Delhi on Friday, having previously opposed the trial in India.
Their arrival came after a shock decision by Italy's government to drop its opposition to their trial in India for shooting dead two fishermen off the coast of Kerala.
The Indian government, which last week issued orders to immigration authorities to prevent Rome's ambassador to New Delhi from leaving the country, hailed Italy's U-turn as a victory for diplomacy.
Italy meanwhile said it had received assurances the marines would not face the death penalty if convicted, as President Giorgio Napolitano paid tribute to the pair's "sense of responsibility" in agreeing to return.
Italy caused outrage in India by announcing on March 11 that Latorre and Girone would not return after they were given bail to vote in last month's Italian election, reneging on pledges made at the Supreme Court.
But in a late night U-turn which came only hours before a deadline for the pair's return, the Italian government said it had received "ample assurances" from India that the marines' rights would be respected.
"The government decided, also in the interests of the marines, to maintain the commitment taken when they were granted leave to take part in the elections to return to India by March 22," said a government statement.
Prime Minister Manmohan Singh, who had warned of "consequences" if the pair did not return by March 22, was among those to express their satisfaction at the change of heart.
"I am happy that the integrity and dignity of the Indian judicial process has been upheld," he told reporters.
Others were more triumphant, including law minister Ashwani Kumar who called their return "a victory of India's constitution, our diplomacy, judicial system and also vindication of our stand".
After Italy said the marines would not return, Indian authorities forbade Italian ambassador Daniele Mancini from leaving the country, saying he had broken a written promise to the Supreme Court. Airports were even put on alert.
India's hardline stance caused alarm in diplomatic circles, with European Union foreign policy chief Catherine Ashton declaring on Tuesday that limiting Mancini's movement ran "contrary to the international obligations".
Diplomats said that the impasse was broken after an assurance given that the marines would not face the death penalty, which are only carried out in the "rarest of rare" cases under Indian law.
In an address to lawmakers, foreign minister Salman Khurshid said India had assured Italy the marines were in no danger of being executed as "this case would not fall in the category of matters which attract the death penalty".
Italian foreign minister Giulio Terzi confirmed that Rome's concerns had been laid to rest.
"The agreement with India is that the case does not include any possibility of the maximum punishment being applied," Terzi told La Repubblica daily.
Italy had been insisting the pair should be prosecuted in their home country because the shootings involved an Italian-flagged vessel in international waters. India says the killings took place in waters under its jurisdiction.
The two are accused of murder after they shot dead two Indian fishermen they mistook for pirates off the Indian port of Kochi last year. They were serving as security guards on an Italian oil tanker.
Dora Gelastine, the widow of one of the victims who was just known as Gelastine, said she was delighted the marines had returned to face trial.
"I don't know much about the whole legal process but I want the killers to face prosecution as per our law. It's minimum justice for my innocent husband," she told AFP.
The two countries do have a prisoner transfer agreement, raising the possibility that the marines could serve their sentence in Italy if convicted.
Relations between the two countries have also been soured by corruption allegations surrounding a $748 million deal for the purchase of 12 Italian helicopters, which the Indian government is now threatening to scrap.
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