"Governments and powers are interchangeable - we live in a democracy", Haradinaj said on Facebook, adding he was stepping down because "I have been called on to appear for questioning as a suspect" by the court next week.
Haradinaj submitted his irrevocable resignation at the end of the government session, said a statement issued by the Kosovo government.
Since then, Haradinaj has served as prime minister of Kosovo. I will go there. "I will perform my duties and defend Kosovo as a warrior of my country", he said.
Haradinaj, former leader of the Kosovo Liberation Army (KLA), a paramilitary force which Serbia considers a terrorist organization, announced his decision during a government session in Pristina, explaining that, being a suspect in a case, he wishes to "separate the function of PM from his person".
More than 10,000 of the dead were ethnic Albanians, nearly 2,300 were Serbs and Montenegrins and the remainder included a few hundred Romas.
The court started questioning former Kosovo fighters this year.
"I believe in the purity of the war of the Kosovo Liberation Army and I believe in the high moral values of the soldiers who fought for freedom", Thaci said in a statement. He was acquitted twice on lack of evidence. He did so first in 2005, when the tribunal indicted him of war crimes.
"Kosovo citizens will be informed in time", Thaci added.
A bloody Serb crackdown against Kosovo Albanian separatists and civilians led North Atlantic Treaty Organisation to intervene by bombing Serbia in spring 1999.
In mid-January, the special court began interrogations in The Hague, where two other former KLA officials, Rrustem Mustafa-Remi and Sami Lushtaku were questioned.
Ramush Haradinaj, 51, served as a rebel commander in the 1998-1999 Kosovo conflict, which eventually led to Kosovo declaring independence.
Haradinaj resisted entreaties from the United States and the European Union to lift or suspend the tax.
He confirmed that he will appear before Hague prosecutors next week for questioning, adding that he can not travel to the Hague as head of Kosovo Government, but only as ordinary citizen of the Republic of Kosovo.