Sasi was removed as district secretary last week and demoted to lower tier alongwith two other leaders, including national executive member and former minister C Divakaran, over "flawed selection of candidate" for the seat.
Talking to reporters here, Sasi said he was giving up the party membership and his letter would be faxed to the state leadership.
Sasi has made his plan to quit the party soon after the action against him and other leaders was announced by CPI state secretary Panniyan Raveendran last week.
Sasi reiterated his charge that he was victimised by the top leaders as Bennet Abraham's candidature for the seat to take on Congress' Shahi Tharoor and BJP's O Rajagopal was pressed by the secretariat which included Raveendran and other national executive members from the state.
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The trouble in the unit over the humiliating defeat of Abaraham headed to a flashpoint recently with the state council demoting three leaders.
The state leadership as a whole had came under attack in the council meet over the selection of Abraham as its contestant in the prestigious seat, where Tharoor scored a second consecutive win with Rajagopal coming a close runner-up.
Based on the report of an internal inquiry panel which found fault with the choice of candidate, most members of the state council had unleashed an unsparing attack on the top functionaries, including state Secretary Panniyan Raveendran.
The three-member panel which probed the defeat had indicted the state leadership and key district functionaries over the choice of the candidate. There had been allegations that the candidate selection was made with an eye on polarising votes of a particular community in the area.