The incidents were registered during a Euro 2020 qualifier in the capital Sofia and caused the game to be halted twice.
Bulgarian Prime Minister Boyko Borissov called for Mihaylov to quit as a result of the racism seen at the game.
“I urge Borislav Mihaylov to immediately resign as president of the Bulgarian Football Union! It is unacceptable for Bulgaria, which is one of the most tolerant countries in the world – and people of different ethnicities and religions live in peace – to be associated with racism and xenophobia,” Borissov wrote on Facebook.
The news of the resignation came just hours after a Bulgarian Football Union (BFU) spokesman said Mihaylov would not quit because the state has no right to interfere in football.
A later statement said that Mihaylov's official resignation would be presented Friday to the Executive Committee.
Mihaylov, a former goalkeeper, had previously denied accusations of racism against Bulgarian football and criticized England for what he considered a “fixation.”
Them Bulgaria fans are absolutely disgusting, @UEFA needs to do something about this. Racism doesn’t have a place in football and needs to be kicked out. pic.twitter.com/YJ3COGfFtM
After the match held on Monday, calls for urgent action from anti-racism campaigners and politicians have been made and some anti-racism militants said stopping the game was not sufficient and England players should have left the field.
A spokesman for British Prime Minister Boris Johnson said the European governing body (UEFA) who organizes the competition needs to take more actions to confront "vile" racism.
For its part, UEFA president Aleksander Ceferin called on the politicians to play a more consequent role arguing that football actors cannot solve the problem alone.
"The football family - everyone from administrators to players, coaches and fans - needs to work with governments and NGOs to wage war on the racists and to marginalize their abhorrent views to the fringes of society," Ceferin stated.
UEFA said it had started disciplinary proceedings against the Southeastern European country on a number of charges including racist behavior.