Acharya, whose house was damaged by agitating students following the death of Rohit Kumar, a third-year Electrical Engineering student, earlier in the day said before the media tonight that he was "resigning".
The Director's move came as he rejected the students' demand to suspend the Superintendent of IIT-run hospital for alleged negligence leading to the death of Kumar and maintained that an inquiry panel should first probe the incident before any action could be taken.
Police cordoned off the Director's residence and personnel of Rapid Action Force were also deployed to avoid a flare up as the students laid siege protesting the death of their mate.
Police said Kumar, who had a history of epilepsy, was admitted to B C Roy Hospital in the campus after he met with an accident two days ago.
Kumar, who hailed from Patna and was a resident of Lala Lajpat Roy hostel of the premier institution, died while being shifted to Midnapore Medical College and Hospital.
Alleging that a doctor did not accompany the sick student and he had been left unattended till 9 am today, angry students gheraoed the residence of the Director, within the campus, broke window panes and damaged his car parked infront.
The Director and his family members were safe.
While Acharya, flanked by students, announced before the media having handed over charge to Deputy Director Madhusudan Chakraborty, IIT sources, however, said the director or any member of faculty could only resign after communicating to the Board of Governors.
The Deputy Director, IIT-K Registrar, Dean-Alumni Association and the SDO, Kharagpur, were still holding talks with the students to end the impasse.