Jared O’Mara was suspended last year after a series of posts dating back over a number of years emerged, along with claims he used transphobic slurs and called a woman he dated an “ugly b****”.
He was recently reinstated by the party after being given a formal warning – but in an open letter to constituents on his website, Mr O’Mara revealed he had now decided to leave the party.
Mr O’Mara claimed he had not been listened to nor faced a fair investigation.
“I am of the opinion that the Labour Party no longer shares my commitment to the true definition of equality and compassion,” he said.
“There is no doubt that I made mistakes as a young man using distasteful language as a clumsy attempt at satire and sarcasm online. But that does not mean that is who I am today.”
Mr O’Mara was elected to represent the South Yorkshire constituency in the 2017 general election, ousting former Lib Dem leader and deputy prime minister Nick Clegg in the process.
He had yet to make his maiden Commons speech when the comments, made in his early 20s, came to light.
Mr O’Mara was reinstated after Labour’s national executive committee disputes panel ruled the case did not meet the threshold to be referred for expulsion. Although the committee did recommend he should undergo mandatory training.
Mr O’Mara went on to suggest in his letter that he will not be stepping down as an MP, saying: “I might be leaving Labour but I am still at your side”, and offering constituents help with casework.
Describing himself as “the first autistic MP in our history”, he wrote: “I didn’t commit any crimes, yet I have been made unfairly to feel like a criminal.
“Nobody should be made to feel ashamed for mistakes they make when they are young.”
He added: “I would be lying to those of you whom I represent, and those close to me like my parents and sister respectively, if I continued under the pretence that I feel there is a place of acceptance and empathy for me as a working-class, underprivileged disabled man within the Labour Party.
“I have experienced little to make me feel welcome, understood and accepted during this last year.”
A Labour Party spokesman said: “We’re disappointed Jared has decided to resign from Labour after we won the Sheffield Hallam seat from Nick Clegg and the Lib Dems last year.
“We wish him well for the future.”