News of his departure comes in the same week that a joint government-RBI panel was set to complete its study on how much excess reserves the central bank holds and can be transferred to the state to help finance the budget.
Acharya's exit is the second high profile exit from the RBI in the past six months. In December, governor Urjit Patel resigned almost nine months before the end of his scheduled term over differences with the government. Former RBI Governor Urijit Patel too left before his term ended, making him the first governor since 1990s to do so.
While the two parties have a long history of disagreements - be it over autonomy in setting the monetary policy, regulating banks or managing the rupee value in the forex market - matters reached the public domain for the first time previous year.
"Appointing government (or government-affiliated) officials rather than technocrats to key central bank positions, such as governor, and more generally, senior management, is among the ways the institutional autonomy can be undermined", he had said.
Acharya had clashed with Prime Minister Narendra Modi's government over an erosion of the central bank's independence.
The rift surfaced after Deputy Governor Viral Acharya in a hard-hitting speech pitched for "effective independence" of the central bank.
A statement on the RBI site said: Reports have appeared in certain sections of the media that Viral V Acharya, Deputy Governor of the Reserve Bank of India (RBI) has resigned from his post. Earlier in December 2018, Governor Urjit Patel had resigned almost nine months before the end of his scheduled term.
The government quickly moved in and appointed former Economic Affairs Secretary Shaktikanta Das as the 25th Governor of the RBI.
Acharya argued that at least a part of the recent growth slowdown is due to temporary factors and at the June meeting, Acharya voted for a cut in rates as an "insurance" against a further slowdown.
Deputy Governor Viral Acharya arrives to attend a news conference after a monetary policy review in Mumbai, December 5, 2018. Noting that liquidity infusions of the central bank are determined by the needs of the economy and not the price of long-term assets, he had snubbed any calls for more bond purchases RBI to check rising yields.
Acharya has taken a similar view on demand for easier liquidity conditions.