A spokesman at the Medellin-based club said Escobar's resignation had been accepted on Tuesday, one week after it had first been offered.
Escobar, brother of Andres Escobar who was murdered shortly after scoring an own goal at the 1994 World Cup, had been in charge of the club since the start of last year and before that had been assistant to Juan Jose Pelaez.
'It was a tough decision because this institution is part of my soul but I was defending my principles as a coach,' he told the newspaper El Colombiano.
His resignation came after the club directors decided to suspend three players -- Gerardo Bedoya, Hugo Morales and Hector Hurtado -- and refused Escobar's request to allow them back.
Atletico, South American champions in 1989, have plunged into one of the worst crises in their history and were thumped 5-1 by Tolima in a league match on Sunday.
The defeat left them 17th in the 18-team Apertura championship with four points from six games.
The other coaching changes have seen Mario Vanemerack leave Boyaca Chico, Nestor Otero depart Real Cartagena and German Gonzalez fired by Santa Fe.