The news comes two days after the club was one of 12 teams to announce the formation of the Super League, which has led to significant backlash among fans.
Mark Ogden of ESPN reported Woodward was planning to step down in the summer, but the move came earlier following the blowback from the Super League.
Woodward had already been an unpopular figure among supporters while overseeing a disappointing run from one of the biggest clubs in the world.
The 49-year-old stepped into his role in 2012 as Manchester United won the Premier League title in his first season, the 13th under manager Alex Ferguson. The club hasn't been as dominant since then with zero Premier League crowns over the next seven years while finishing outside the top four in four of those seasons.
The club returned to Champions League this season but failed to make it out of the group stage. United was relegated to the Europa League, where it has reached the semifinals.
With Manchester United also failing to land many impact transfers in this time, there was not a lot of confidence surrounding the administration.
The Super League created even more drama with widespread criticism amid supporters because of the lack of relegation and the guaranteed spots for the founding members.
Manchester United captain Harry Maguire reportedly confronted Woodward over the decision Monday, per Jake Polden of Mirror.
The club will now have some difficult decisions ahead regarding its future.