After winning an interim high court injunction against the publication of former lover Jeff Chevalier's story, which included allegations about Browne's personal life and misuse of company funds, Browne appealed to the Judicial Committee of the House of Lords.
But this appeal failed, and the Mail on Sunday will publish details about his relationship with Chevalier.
In addition, Browne has been shown to have lied under oath.
In seeking the injunction to prevent the publication of Chevalier's story, Browne, 59, had said he met Chevalier, believed to be in his 20s, while exercising in Battersea Park. But in fact, the two men met through an online male escort agency, suitedandbooted.com.
Browne, who had been due to step down as BP's chief executive in July, said he decided to resign now to “avoid unnecessary embarrassment and distraction to the company”.
In a statement, Browne said he was once in a four-year relationship with Chevalier, a Canadian, who has told his story to Associated Newspapers, publishers of the Mail on Sunday and other UK newspapers.
The Mail on Sunday has denied intruding on Browne's private life, saying it had sought to publish "a business story involving issues of great importance to shareholders and employers of BP."
But Browne disputed this.
“In my 41 years with BP I have kept my private life separate from my business life,” he said.
“It is a matter of deep disappointment that a newspaper group has now decided that allegations about my personal life should be made public.”
BP chairman Peter Sutherland said an internal review into allegations that Browne had abused company assets and resources found the claims were "unfounded or insubstantive".
The likelihood of embarrassing revelations about his personal life had contributed to Browne's decision to take early retirement. His lying to the judge meant he had to go immediately.
Browne is believed to have lost a £3.5 million package and a potential £12 million in share options by leaving BP earlier than the scheduled July date.
He joined BP as an apprentice in 1966 while still at university and remained with the company throughout his career. His first posting was as a field engineer in Anchorage, Alaska in 1969.
Browne served as BP CEO for over a decade, and will be replaced by head of exploration and production Tony Hayward.
During Browne’s tenure with the oil giant, he presided over a fivefold increase in the company’s market capitalisation to £104.6 billion ($A261.2 billion) and profits to $22.3 billion. The group’s share price has also gone up around 250%.
But he was also at the helm when two disastrous mishaps in the company’s US operations occurred – the Texas City refinery fire and explosion that killed 15 people, and pipeline corrosion in Alaska that led to an extended shutdown of the eastern part of the major Prudhoe Bay oil field.