Vince McMahon, the longtime chairman and former chief executive of World Wrestling Entertainment, resigned from the board of W.W.E.’s parent company on Friday, one day after a former employee accused him of sexual assault and sex trafficking in a lawsuit.

Mr. McMahon, 78, was the executive chairman of TKO Group, the parent company of W.W.E., where he no longer held a formal position. W.W.E. employees were informed of the changes in an email sent by Nick Khan, the company’s president.

“He will no longer have a role with TKO Group Holdings or W.W.E.,” Mr. Khan wrote in the email, a copy of which was obtained by The New York Times.

The lawsuit, filed on Thursday in U.S. District Court in Connecticut, accuses Mr. McMahon of trafficking the employee, Janel Grant, as well as physically and emotionally abusing her. The graphic complaint, which also named John Laurinaitis, a former W.W.E. executive, and the company itself as defendants, says that Mr. McMahon and Mr. Laurinaitis had once taken turns raping Ms. Grant, among numerous other allegations.

Mr. McMahon eventually pressured Ms. Grant to sign a nondisclosure agreement in exchange for $3 million, according to the complaint, but paid her only $1 million. The lawsuit also alleges that a number of high-ranking W.W.E. employees and board members, who were not named in the complaint, were aware of Mr. McMahon’s behavior, raising questions about who knew what, and when.

In a statement released after his resignation, Mr. McMahon called Ms. Grant’s lawsuit a “vindictive distortion of the truth” and said he looked forward to clearing his name. But he said he had decided to resign “out of respect” for TKO, W.W.E. and their employees and wrestlers.

Mr. McMahon and his wife, Linda, founded the company that would become W.W.E. in 1980 and expanded it from a regional business into a national and eventually an international one. They made wrestlers like Stone Cold Steve Austin and the Undertaker famous, and after a lull in the 2000s, the company’s wrestlers have become more popular than they had been in years.

But repeated accusations of sexual misconduct against Mr. McMahon have clouded the company’s fortunes. In 2022, a special committee of W.W.E.’s board conducted an investigation into Mr. McMahon’s conduct and found that over 16 years he had spent $14.6 million in payments to women who had accused him of sexual misconduct. One was a former wrestler who said Mr. McMahon had coerced her into giving him oral sex and then later decided not to renew her contract, according to The Wall Street Journal.

A further company investigation found that he had made an additional $5 million in payments to two women.

Mr. McMahon temporarily resigned from W.W.E. during the investigation. But he remained the company’s largest shareholder, and in early 2023, after the W.W.E. board completed its investigation of his behavior, Mr. McMahon used his voting shares to replace three board members with two allies and himself, as chair. His daughter, Stephanie McMahon, who had served as chair of the board and W.W.E.’s co-chief executive officer, resigned from the company.

Soon after his return, Mr. McMahon initiated a sale process that resulted in the sports and entertainment conglomerate Endeavor’s buying W.W.E. Endeavor then combined W.W.E. and another one of its holdings, Ultimate Fighting Championship, a mixed martial arts promotional company, into a new public company, TKO Group.

Since then, W.W.E. has signed long-term media rights contracts that position it well for the future. In September, NBCUniversal paid a reported $1.4 billion to buy the rights to show W.W.E.’s “Friday Night SmackDown” for five years, starting later in 2024.

On Tuesday, TKO Group announced that it had sold the rights to W.W.E.’s flagship weekly show, “Raw,” to Netflix in a deal worth $5 billion over 10 years. The deal is by far Netflix’s biggest foray into live programming, as it seeks to attract more revenue through advertising, which in media is primarily spent on live entertainment.

But in a possible sign of difficulties to come for W.W.E., the meat snack company Slim Jim, a longtime sponsor of professional wrestling, said Friday that it was pausing its sponsorship of W.W.E. in light of the “disturbing allegations against Vince McMahon.”