The 61-year-old executive, best known for transforming Pixar from a small graphics department at Lucasfilm into the world's most successful animation studio, was the pioneering director of "Toy Story" and "Toy Story 2."
Lasseter apologized in November last year to "anyone who has ever been on the receiving end of an unwanted hug or any other gesture they felt crossed the line" and promptly went on sabbatical.
"The last six months have provided an opportunity to reflect on my life, career and personal priorities," the executive said in a statement released by Disney.
"While I remain dedicated to the art of animation and inspired by the creative talent at Pixar and Disney, I have decided the end of this year is the right time to begin focusing on new creative challenges."
The Oscar-winning filmmaker and senior executive conceded when the scandal broke that he had been "falling short" in ensuring a culture of "trust and respect" at his animation studios.
The admission followed a flood of complaints of sexual abuse and harassment by numerous powerful entertainment industry figures, most notably Harvey Weinstein, who posted bail of $1 million last month after being charged in New York with multiple sex crimes.
Lasseter's issues were unearthed in an investigation by entertainment trade paper The Hollywood Reporter, which described a "pattern of alleged misconduct detailed by Disney/Pixar insiders."
The weekly's report -- never confirmed by Disney or Lasseter -- quoted a longtime Pixar employee claiming Lasseter was known for "grabbing, kissing, making comments about physical attributes."
Another move known as "the Lasseter" was deployed to prevent their boss from placing his hands on their thighs, the report said.
One source told the paper of "awkward encounters" with Lasseter, who liked to hug in meetings.
"You'd hug him and he'd whisper in your ear, a long time," the source said. "He hugged and hugged and everyone's looking at you. Just invading the space."
Disney said in a statement that was effusive in its praise for Lasseter that the veteran filmmaker would assume a consulting role before leaving in the New Year.
"John had a remarkable tenure at Pixar and Disney Animation, reinventing the animation business, taking breathtaking risks, and telling original, high quality stories that will last forever," Disney chief Bob Iger said.
"We are profoundly grateful for his contributions, which included a masterful and remarkable turnaround of The Walt Disney Animation Studios."