The report was prepared at the request of member states, she had said.
Israel and its staunch ally, the United States, immediately called for its removal.
Khalaf added that she stands by the commission's report.
President Mahmoud Abbas on Saturday said he would award the highest Palestinian medal to former United Nations official Rima Khalaf for her courageous stand for Palestinians, local media reported.
"The United States is outraged by the report", Nikki Haley, the USA envoy to the UN, said Wednesday in a statement.
NGOs, grassroots, and even Lebanon's Hizbollah, voiced support for outgoing UN Economic and Social Commission for Western Asia's (ESCWA) top official, Rima Khalaf, in her dispute with UN chief over her organisation's report on Israel's "apartheid".
Khalaf told a press conference in Beirut on last Friday that she had resigned as a result of lobbying by UN Secretary-General, Antonio Guterres, to withdraw a report from the ESCWA website upsetting US and its ally, Israel.
The UN is "incapable of taking a stand" and the debacle over the report proved it can not be counted on "to defend human rights in our region", he said.
The report concluded "Israel has established an apartheid regime that dominates the Palestinian people as a whole".
UN Spokesman, Stephane Dujarric stressed to the media that the issue was not the content of the report, but rather the process used in publicizing it.
The accusation - often directed against Israel by its critics - has never before been made by a United Nations body.
US Ambassador to the UN, Nikki Haley, reacted to Khalaf's resignation and said it was appropriate, Reuters reported.
United States envoy to the UN Nikki Haley, who had demanded the report's withdrawal last week, said in a statement: "When someone issues a false and defamatory report in the name of the U.S., it is appropriate that the person resign".
Khalaf, undersecretary general and executive secretary at ESCWA, announced her resignation on Friday, stating that the United Nations secretary general had asked her to withdraw a report in which she accused Israel of being an "apartheid state", Agence France-Presse (AFP) reported.
"U.N. agencies must do a better job of eliminating false and biased work, and I applaud the Secretary-General's decision to distance his good office from it", Haley said in a statement.