New York Gov. Eliot Spitzer has resigned after being linked to a prostitution ring.

Spitzer will be replaced by Lt. Gov. David Paterson as New York’s 55th governor, and the state's first black governor. At Paterson's request, Spitzer said the resignation would be effective Monday, March 17, to "allow for an orderly transition."

"In the past few days I've begun to atone for my public failings," Spitzer said in a statement Wednesday in his Manhattan office. "I cannot allow for my private failings to disrupt the people's work."

"To those of whom much is given, much is expected," Spitzer said. "I have been given much ... I'm deeply sorry that I did not live up to that."

With his wife, Silda, by his side, Spitzer said that he will do what he needs to do to heal his family.

"I go forward with the belief as others have said that as human beings our greatest glory consists not in never falling but in rising every time we fall," Spitzer said.

The resignation completes a stunning fall from power after he was nationally disgraced by links to the high-priced prostitution ring. According to a law enforcement official, the New York Democrat's involvement in the ring was caught on a federal wiretap as part of an investigation opened in recent months.

Former Assemblyman John Faso lost to Spitzer in 2006. He said that he's often said Spitzer "had one set of rules for himself and one set for everyone else."

But Faso said he never imagined circumstances "so glaring."

As news of the resignation spread on the floor of the New York Stock Exchange, some traders applauded. One of them said some firms had even cracked open champagne to celebrate.

Spitzer's crusades had earned him the nickname "Sheriff of Wall Street."

At a morning news conference, Senate Majority Leader Joseph Bruno, Spitzer's chief rival, said he had not yet heard from the governor but that he was moving on with the business of the state. Lawmakers were set to vote on budget bills Wednesday afternoon.

"We are going to partner with the lieutenant governor when he becomes governor," said Bruno. "David has always been very open with me, very forthright ... I look forward to a positive, productive relationship."

Bruno, though the next highest-ranking official, does not become lieutenant governor upon Paterson's ascension to governor. The lieutenant governor's office would remain vacant until the next general election in 2010 under state law. However, whenever Paterson is out of state or if he were to become incapacitated, Bruno would be acting governor.

Spitzer was caught on a federal wiretap arranging to meet in a Washington hotel room the night before Valentine's Day with a prostitute from the Emperors Club VIP escort service.

Spitzer was not named in the complaint, but was referenced as "Client 9," according to law enforcement officials. The complaint indicated that he had used the prostitution service before.

Investigators said Tuesday he was a repeat customer who spent tens of thousands of dollars. Another law enforcement official said that it could be as high as $80,000.

The complaint said that he met with the woman, identified as Kristen, in Room 871 but does not identify the hotel. The New York Times said that Spitzer stayed at the Mayflower Hotel in Washington, D.C.

Room 871 at the Mayflower that evening was registered under the name George Fox, a friend and donor of Spitzer, the New York Times said. A law enforcement official told the newspaper that people running the prostitution ring knew Spitzer by the name of George Fox. Fox released a statement regarding his name being tied to the event.

Spitzer was the initial target of the investigation and was tracked using court-ordered wiretaps that appear to have recorded him arranging for a prostitute to meet him at a Washington hotel in mid-February, the official said.

The case started when banks noticed the frequent transfers from several accounts and filed suspicious activity reports with the Internal Revenue Service, the official said. The accounts were traced back to Spitzer, which led investigators to open an inquiry.

Attorney General Michael Mukasey was made aware of the investigation because it involved a high-ranking political official.

The governor has not been charged, and prosecutors would not comment on the case.