Chief minister Prithviraj Chavan had refused to legalise the encroachment, as the matter was sub-judice.
Raut said, “I have not resigned, but expressed the sentiments of the people from my constituency on the issue.”
The sudden development, on Sunday, had sparked political activity in the second capital, with Raut’s supporters gathering at his residence and staging a protest.
The 80.90-acre plot in contention originally belonged to the Empress Mills, which had reserved it to provide housing facility to their workers.
The land was later taken over by the state and a layout plan was proposed by the Empress Mills’ Workers Housing Society.
It is mandatory to earmark 15% as open space and 5% as public utility space The 20% land was allegedly encroached upon by Raut and other influential people, and the minister wants to regularise it.
Responding to a public interest litigation (PIL), a high court division bench had last year directed the state to take necessary action.