Raab, who was appointed secretary of state for leaving the EU in July, said he could not “in good conscience” continue to support the draft withdrawal agreement proposed by the Prime Minister.
In his resignation letter, he said he decided to quit because Mrs Mays Brexit deal poses a “very real threat to the integrity of the UK” and he opposed an “indefinite backstop arrangement”.
Raabs resignation is the latest in a series of stinging blow to Mrs Mays authority just hours after she secured cabinet support for her withdrawal agreement at a stormy five-hour meeting on Wednesday.
In a morning of high drama, Labour confirmed its MPs will vote down the deal and Northern Ireland minister Shailesh Vara quit in protest, leaving Mrs Mays premiership hanging in the balance.
Raab tweeted: "Today, I have resigned as Brexit Secretary. I cannot in good conscience support the terms proposed for our deal with the EU. Here is my letter to the PM explaining my reasons, and my enduring respect for her."
THREAT TO UK: Brexit minister Dominic Raab has resigned from the cabinet (Pic: DS)
HOUSE OF CARDS: Raab has walked away from the cabinet over Theresa May's deal (Pic: TWITTER)
EU ARE GONE: Raab said the deal presents a 'real threat to the UK' (Pic: GETTY)
Raab wrote in his letter to the PM: "It has been an honour to serve in your government as justice minister, housing minister and Brexit secretary.
"I regret to say that, following the cabinet meeting yesterday on the Brexit deal.
"I must resign. I understand why you have chosen to pursue the deal with the EU on the terms proposed, and I respect the different views held in good faith by all of our colleagues."
He added: "Above all, I cannot reconcile the terms of the proposed deal with the promises we made to the country in our manifesto at the last election. This is, at its heart, a matter of public trust."
He is the second Brexit secretary to stand down from the role in just six months after David Davis resigned from the post over Mrs Mays so-called Chequers plan.
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FIRST RESIGNATION: Shailesh Vara is the first minister to resign over Theresa May's government (Pic: WIKIPEDIA)
Remain-backing Tory MP Anna Soubry tweeted: "Raab's resignation marks the end of PMs Withdrawal Agreement.
"This is very serious. The PM will clearly be considering her position.
"My own view is that we need a Govt of National Unity and we need it now."
Former Ukip leader Nigel Farage, who yesterday said Mrs May's deal was the worst "in history", said: "Well done Dominic Raab, a few more and we will be rid of this duplicitous Prime Minister."
MAJOR BLOW: Theresa May's authority has been diminished by the resignation of Raab (Pic: GETTY)
His resignation could be the first of a wave of departures from the government over the agreement Mrs May has reached with EU negotiators.
Her deal has been savaged by Remain and Leave-supporting MPs across the political spectrum, while in Europe, it appears to have gone down well.
Brexit-backing Tory MPs on the backbenches have threatened to unseat Mrs May by sending no confidence letters to Sir Graham Brady, chairman of the 1922 Committee.
Meanwhile, the EU council president Donald Tusk this morning announced that an extraordinary summit in Brussels on November 25 will take place to finalise the UKs withdrawal agreement.
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PLEASED AS PUNCH: Smiling Michel Barnier and Donald Tusk present the withdrawal agreement (Pic: GETTY)
Striking a tone of caution, however, Tusk suggested the summit may be derailed in the event something “extraordinary happens”.
The PM cleared the first hurdle when cabinet ministers finally approved the draft terms of her agreement with Brussels at a stormy five-hour meeting on Wednesday.
Speaking outside 10 Downing Street minutes after the meeting concluded, she acknowledged she faced "difficult days ahead" as she attempts to win round critical MPs.
"I firmly believe, with my head and my heart, that this is a decision which is in the best interests of the United Kingdom," she said.
"At the same time she warned Brexiteers that if they failed to back her plan they risked ending up with "no Brexit at all".
IN THE NATIONAL INTEREST: Theresa May secured support for her deal from the cabinet (Pic: GETTY)
“I cannot support an indefinite backstop arrangement”
Dominic Raab
Following the release of the 585-page agreement document, Jacob Rees-Mogg – the leader of the pro-Brexit European Research Group – wrote to all Tory MPs urging them to vote against it.
Rees-Mogg said that he was not among those MPs who had written to Brady, but suggested he could be "very close" to doing so.
"Certainly this has dented my confidence," he told ITV's Peston programme. "Politics depends on trust and this document is shattering to trust."
While the Cabinet agreed to collectively support the agreement, there was speculation that some ministers were so unhappy that they could still quit in protest.
Reports suggested as many as a third of the 28 ministers attending the meeting in No 10 voiced doubts about the deal.
Nick Timothy, Theresa May's former chief of staff, wrote in the Daily Telegraph that Parliament will "surely" reject the proposal.
"The proposal presented to Cabinet is a capitulation," he wrote.
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