Despite repeated attempts to contact him on phone, Khanna was not available for comments. His Personal Assistant (PA) Rocky Gill, however, confirmed his resignation.
According to party sources, Khanna was upset over Sangrur MP Vijay Inder Singla allegedly ignoring him and other senior leaders of Assembly segments while distributing MPLAD funds and launching development projects.
Singla has sought re-election from Sangrur parliamentary constituency.
Khanna was also unhappy after Patap Singh Bajwa was elected as PPCC chief, party sources said. In the 117-member Punjab Assembly, the strength of Congress is now reduced to 43. SAD has 57 members while its ally BJP 12 and there are three Independents.
Earlier, ahead of Lok Sabha elections sitting Congress MLA Jeet Mohinder Singh Sidhu left the party and joined the Akali Dal.