Rangers chairman Dave King had already called for Hughes to be suspended by the SFA after a photograph of a 2006 article from The Publican appeared in a newspaper.
Hughes, who was then chief executive of the trade magazine’s publisher, was credited as writing in a piece on Glasgow pubs: “The next best thing to being at Celtic Park (only the great unwashed venture south to Ibrox) is watching the game, pint of Tennents in hand, with some like-minded souls.”
Now the SFA has announced in a statement that independent non-executive director Hughes will not seek re-election at Wednesday’s Annual General Meeting.
Hughes, who joined the SFA board in April 2015, has been on holiday since the row broke out but has now decided to stand down after returning to Scotland.
SFA chief executive Ian Maxwell said: “I would like to thank Gary for his service to Scottish football over the past three years. He brought a wealth of business experience to the game and a passion to drive Scottish football forward at all levels.
“We wish him the best of luck for the future and thank him for his efforts as a trusted and valued member of the board.”
Hughes - also on the boards of several retail and healthcare firms along with the
Scottish Event Campus, previously called the SECC - added: “It has been an honour and a privilege to bring my professional expertise to the game I love.
“I have been involved in business for 30 years but the commitment of my board colleagues - and indeed everyone involved in Scottish football - to improve the national sport in this country has made it an absolute pleasure.
“I will remain a passionate supporter of the Scottish FA’s activities but it is time to focus on other business interests at home and abroad.”
SFA bosses launched a probe into Hughes’ comments when they emerged last month.
King, who has also called for an investigation into Scottish Professional Football League chairman Murdoch MacLennan’s business links to Celtic majority shareholder Dermot Desmond, gave a statement to the Daily Record demanding Hughes be suspended.
It said: “I can confirm receipt of information, that would appear to be credible, and which merits immediate and thorough independent investigation.
“Mr Hughes should be suspended pending this investigation. I also believe steps must be taken to ascertain whether any other SFA individuals were aware of what Mr Hughes said about Rangers supporters before he was appointed a non-executive director of the governing body in 2015.
“It is important to discover if there has been a breach of the SFA duties and responsibilities to all clubs.”