Sanchez had a long career in law enforcement and ran the department for six years.
The chief felt it was the right time to leave after seeing a significant drop in crime.
Police are responding to fewer taggings and stolen car cases.
People around town say he made a big difference.
"I talked to him quite a bit, he's always there for us when we need him or anything like that. I don't know why he's resigning but I'm going to hate to see him go because he does a great job," said Joseph Moore, who has lived in Wapato for 9 years.
Sanchez says he doesn't plans to get back into law enforcement.
The mayor will serve as acting police chief until the city hires a replacement.