Carlos Rodriguez Andino stepped down after Honduran Foreign Minister Arturo Corales appointed a special commission to investigate.
“In order to safeguard national interests and good relations with the Republic of Colombia, we have asked for the irrevocable resignation effective immediately of Mr Rodriguez Andino,” the foreign ministry said.
According to Honduran media reports, the ambassador’s bodyguard and close friend Jorge Mendoza organized a party that turned into an orgy with prostitutes on December 20 at the embassy to celebrate Christmas.
Reports said the prostitutes stole embassy computers and cell phones.
Colombian police are investigating the incident.
Bogota northern region police chief Jose Baquero said officers were seeking to question two prostitutes who entered the embassy in a vehicle the night of the party.
The party began around 10pm and ended at almost 5am the next morning, according to police.
The US Secret Service was embroiled in a similar scandal involving prostitutes and its agents last April in the Colombian city of Cartagena, where President Barack Obama attended the Summit of the Americas.
More than two dozen Secret Service agents and military personnel, tasked with preparing security for Obama’s high-profile visit, were sent home. Nine have since left the agency it seeks to repair its tarnished reputation.