The 62-year-old made the announcement at an Extraordinary General Meeting of the Championship club's shareholders in a bid to keep disruption at Vicarage Road to a minimum.

The meeting was called by brothers and former directors Jimmy and Vince Russo who own nearly 30 per cent of the club's shares through their company, Valley Grown Salads.

The brothers had proposed a vote of no confidence in the current directors but Simpson's shock announcement stopped such a vote going ahead.

Simpson has been looking to sell the club for around five months but with the announcement coming just seven days after he appointed Chelsea reserve team boss Brendan Rodgers as the new manager, the timing was a surprise.

Simpson will be replaced as the head of Watford Leisure on an interim basis by Wilson, currently a non-executive director at the company.

Wilson and chief executive Mark Ashton - who will remain in place - are now the only directors of the club.

Rodgers, 35, refused to comment on the situation as he prepares his side for their Carling Cup quarter final with Tottenham on Wednesday but was aware that Simpson was looking to sell the club and therefore could have left at any time.

Only last week, when Rodgers was named as new manager following the departure of Adrian Boothroyd, Simpson was keen to stress that the negotiations had included an honest assessment of the club's affairs.

Rodgers said last week: "I've been told very openly and honestly the current situation and there was no need for me to come here if it wasn't right."

Simpson took over in 2002 when the club was facing bankruptcy and saw the club repurchase their Vicarage Road home and reach the Premier League in his tenure.

Rodgers' side drew 1-1 with Doncaster in his first game in charge on Saturday and the Hornets lie in 20th place in the Championship.

Simpson stressed on Monday night that he had not been pushed out of the club.

He told BBC Radio Five Live: "I've been chairman of Watford Football Club for over six years and there was an EGM due to be called and I felt EGMs are never nice and it would be appropriate of me to stand down.

"I've taken some criticism from some of the fans, perhaps I'd backed Aidy (former manager Adrian Boothroyd) too much previously."

He added: "I have not been pushed at all."