Masterton, who has been on the board since 1991, declared he was leaving in a bid to pave the way for consensus over the future running of the club.
Dunfermline were hit with more financial problems on Tuesday when the Scottish Football Association issued them with a notice of complaint over an alleged failure to pay a debt to Hamilton.
They also face the prospect of action from the Scottish Football League after PFA Scotland last week submitted a formal complaint after players were paid just 20 per cent of their monthly wages on Thursday in the latest in a series of delays.
The club are set to announce a new leadership structure on Wednesday with director of football and former manager Jim Leishman fronting a working party.
In a statement, Masterton said: "Over the past few months, many parties have continually asked for unity between the supporter groups and the board and this has obviously not happened.
"I hope therefore my decision to step down from the board of directors will have a unifying effect.
"Every group can have a potential role to play in the future of this great club and the key then is for people to sit down calmly and discuss each and every option.
"I have stated repeatedly that Dunfermline is too small a town for squabbling about the club's direction and that everyone must pull in the one direction otherwise Dunfermline risks losing a huge asset to the town and local economy."