Reddy's mother, YS Vijaya, has also quit as an MLA in a bid to register her protest against the issue, media reports said on Saturday.
Reddy's party had slammed the move by the Centre, saying that it was aimed partly at containing the growing popularity the party leader, who quit the Congress in 2011 and formed the YSR Congress.
The Telangana issue has divided political leaders from the state as the Congress itself faced a rebellion with several lawmakers and legislators from the state tendering their resignations.
Officially urging the government to take constitutional steps that will see the state's formation, the Congress Working Committee (CWC) last month passed a resolution of declaring Telangana as a state following a meeting of the constituents of the ruling United Progressive Alliance (UPA).
The state, which could is likely to take six months to be formed, is expected to have 10 districts, a population of 35.38 million and an area of 1.14 lakh square km and including Andhra Pradesh capital Hyderabad, which will serve as a common capital for 10 years.
Prime Minister Manmohan Singh supported the formation of the state, saying that it was very much required "for the development of the entire Andhra region".
--IBNS (Posted on 10-08-2013)