The news will come as a massive shock to all Wednesday fans although there is no doubt that many will be celebrating.
Allen has been embroiled in rows with fans recently and his attitude towards them at times has angered him.
A club statement said: "At a board meeting today, Mr Dave Allen resigned as chairman as director of Sheffield Wednesday Football Club with immediate effect.
"The board would like to place on record their appreciate of Mr Allen's significant contribution during his chairmanship."
Who will now be in control of the club? Is there a chance of Wednesday to go into administration? All these questions will be answered very soon.
I personally thought he did a good job in stabilising the club, keeping them away from Ken Bates and restructuring the club.
But whatever happens, a few hectic weeks at Hillsborough will ensue - Allen of course has resigned before the AGM and this could have been a factor.