Following accusations that gatherings were conducted last year in his own department, Boris Johnson came under pressure to fire him.
‘To maintain public confidence in the ongoing investigation, the Cabinet Secretary has recused himself for the duration of the process.'
Sue Gray, the Department's second permanent secretary, will complete the task.
‘She will investigate and report to the Prime Minister.'
Johnson appointed Mr Case nine days ago to look into reported parties at Downing Street and the Department for Education in November and December 2020.
After a video released of No 10 personnel joking and laughing over a fake Downing Street party.
It was confirmed that Mr Case may include other alleged parties if he so desired.
His reliability was questioned by allegations of two parties in the Cabinet Office in December 2020.
However, two parties were reported in the Cabinet Office in December 2020.
Guido Fawkes writes that around 15 individuals were invited to one gathering that included drinking and music.
A source told the site that Mr Case did not attend, but did ‘stick his head into the room to call workers out' during the celebration.
One of the events was on December 17, the day before the infamous Downing Street Christmas party, the Times says.
The event was coordinated by Mr Case's personal secretary and labelled as ‘Christmas party!' on digital calendars.
An investigation by Politico and The Independent found Mr Case enjoyed drinks with 15 to 20 colleagues at his office and in the Cabinet Office waiting area.
‘Staff in the Cabinet Secretary's private office took part in a virtual quiz on December 17 2020,' a spokesperson stated.
‘A few of those who were at the office throughout the pandemic took part from their desks, while the rest of the staff was virtual.
Aside from walking through the team's office on his way to his own, the Cabinet Secretary was absent.
‘No external guests or personnel were invited or present. The event lasted an hour and attendees bought beverages and food. He said goodbye to the office personnel before leaving.'
When questioned if the Cabinet Secretary had attended the Downing Street party at the heart of the scandal, the Prime Minister's press secretary asserted that "due diligence" had been done.
M. Case was not at any relevant gathering, said Cabinet Office minister Michael Ellis.
Deputy Labour leader Angela Rayner said: ‘Each revelation shows a culture of ignoring the rules.
Labor said that the investigator should be uncorrupted and free to make an unbiased decision.
Ms Gray, who was the Cabinet Office's director-general for propriety and ethics from 2012 to 2018, is regarded as a tough questioner in an inquiry.
The former chief whip was accused of calling a policeman a 'pleb' at the Downing Street gates in 2012.
At the same year, Labour MP Paul Flynn called Ms Gray his ‘deputy God' in a Public Administration Committee meeting.
‘It took me exactly two years to realise who rules Britain,' said former Tory MP and Cabinet office minister Oliver Letwin of Ms Gray.
A lady named Sue Gray, who is the head of ethics or something in the Cabinet Office, runs the show. Things don't happen until she agrees.'
Then policy editor of BBC Newsnight called her ‘the most powerful person you've never heard of'.