His resignation came a nearly a week after dozens of officers were sacked after an investigation found troops were linked to the disappearances of young civilian men whose bodies were later found in mass graves near the Venezuelan border.
Rights groups say Colombia's US-backed security forces lured or kidnapped victims from slums in Bogota before killing them in combat zones so they could present them as dead rebel fighters in order to inflate their combat figures.
The groups allege hundreds of civilians may have been killed under the policy.
Navi Pillay, the UN's high commissioner for human rights, said on Saturday the extrajudicial killings were "widespread and systematic".
'Crimes against humanity'
He said that the killings were crimes against humanity and that if Colombia's criminal justice system failed to deal with them adequately, they could fall under the jurisdiction of the International Criminal Court.
Montoya, who won wide acclaim for the bloodless hostage rescue of Ingrid Betancourt, the former Colombian presidential candidate, and three US military contractors in July, did not mention the scandal as a factor in his decision to stand down.
He warned Colombians to wait for results from the investigations before judging soldiers in the killings.
Luz Palacio, the mother of a slain victim, said: "If he resigned, it's because he sinned."
Colombia's military has scored historic gains against the western hemisphere's last
major remaining rebel army, the Revolutionary Armed Forces of Colombia, or FARC, since he took command of the army in April 2006.
The country's government has said it rejects the policy and Alvaro Uribe, the Colombian president, last week fired 20 army officers, including three generals, for negligence in failing to prevent or investigate such killings, which he blamed on "criminals conspiring with members of the military".
Uribe has received billions of dollars in US aid to fight guerrillas and presented his military successes as evidence his government deserves a contested US free trade agreement.