STEVE Penny resigned as president and chief executive of USA Gymnastics on Thursday in the wake of the federation's handling of sexual abuse allegations concerning a former team doctor.

Penny's resignation comes a week after the United States Olympic Committee's board of directors sent a recommendation to USA Gymnastics following reports that the organisation turned a blind eye to allegations of sexual misconduct.

"It has been heartbreaking to learn of instances of abuse and it sickens me that young athletes would be exploited in such a manner," Penny, who was named the organisation's president in 2005, said in a statement.

"My decision to step aside as CEO is solely to support the best interests of USA Gymnastics at this time."

The USOC did not divulge details of the recommendation it made to USA Gymnastics but multiple media reports said it called for Penny's departure.

While the USOC could not order Penny's removal, its stance carries influence because it could cut funding or even decertify the gymnastics body.

"Today's announcement will hopefully allow USA Gymnastics to shift its attention to the future with a secure environment for its athletes and continued success in competition," USOC chairman Larry Probst said in a statement.

USA Gymnastics has been under fire since last August when an Indianapolis Star report said the organisation failed to alert authorities over allegations of sexual abuse by coaches.

The scandal is centred on a former team doctor Larry Nassar, who is currently in custody facing child pornography and sexual abuse charges.

Nassar, once a team doctor for Olympians at USA Gymnastics and a former employee at Michigan State University, is also under investigation by Michigan authorities who say they have received more than 50 complaints of sexual abuse by the doctor.

USA Gymnastics chairman Paul Parilla said Penny's departure and a review of procedures for handling sexual misconduct that is being conducted by former attorney Deborah Daniels will help the organisation strengthen its policies going forward.

"The Board believes this change in leadership will help USA Gymnastics face its current challenges and implement solutions to move the organisation forward in promoting a safe environment for its athletes at all levels," he said in a statement.

"We believe Ms. Daniels’ recommendations will identify areas where we can strengthen and refine how we handle sexual misconduct as an organisation, expand our efforts to educate the entire community, including parents and athletes, about what to watch for and what to do if they suspect abuse is happening."