"The wellbeing of my children must come before anything else," Wu said in a statement. "With great sadness, I therefore intend to resign effective upon the resolution of the debt-ceiling crisis. This is the right decision for my family, the institution of the House, and my colleagues."
Wu is the second House Democrat in the last six weeks to be forced to resign as a result of a sex scandal. Rep. Anthony Weiner of New York resigned after sending lewd photos of himself through Twitter.
Wu, who separated from his wife more than a year ago, was first elected to Congress in 1998 as the first Chinese-American to serve in the House. He's maintained a centrist voting record but has been a leading voice on human rights abuses in China. He angered the high-tech firms in his district when he voted against normalizing trade relations with China.
Wu's hometown newspaper, the Oregonian, reported that a California woman had called Wu's office in Portland and reported an unwanted sexual encounter with him. The paper also reported that Wu told senior aides the sexual encounter was consensual.
The newspaper said the woman decided not to press charges because there were no witnesses and it would have been her word against Wu's.
Democratic primary challengers immediately called for Wu's resignation.
"It has been the greatest privilege of my life to be a United States Congressman," Wu said in his resignation announcement. "Rare is the nation in which an immigrant child can become a national political figure. I thank God and my parents for the privilege of being an American."
Wu went on to say that the resignation was the only correct decision to avoid distraction from the important work taking place in Washington.