Jamie Briggs has resigned from the federal frontbench over an "error of professional judgment" involving a female public servant.
Special Minister for State, Defence Materiel and Science Mal Brough has also stepped down from his portfolio while a police investigation into his involvement in the James Ashby and Peter Slipper case is conducted.
Mr Briggs, who is married with three children, stepped down as Minister for Cities and Built Environment in the Turnbull government on Tuesday after the public servant raised concerns about his behaviour following dinner and drinks with Mr Briggs and his chief of staff during an overseas trip.
"Nothing illegal has been alleged or in fact did occur," he told reporters in Adelaide.
The 38-year-old has served in federal parliament in the Adelaide Hills seat of Mayo since 2008.
The incident occurred during an official visit to Hong Kong.
He said the public servant went home after the gathering and made a complaint in the days following.
"I've apologised directly to her but after careful reflection about the concerns she raised and the fact that I was at a bar late at night while on an overseas visit, I have concluded this behaviour has not met the particularly high standards for ministers."
In a statement Prime Minister Malcolm Turnbull said he was "disappointed" by the conduct that led to Mr Briggs' resignation.
"I look forward to Mr Briggs continuing to make a valuable contribution to the work of the government in the future," he said.
Mr Brough is facing a police investigation into whether he asked James Ashby, a former staffer of Peter Slipper, to copy the former Speaker's diary.
He has come under fire after federal police executed a search warrant at his home over the James Ashby affair and has faced repeated calls from Labor for his resignation.
Mr Brough has categorically denied any wrongdoing in relation to the Ashby affair, despite telling the 60 Minutes program last year that he asked Mr Ashby to procure copies of the diary.
In relation to Mr Brough's resignation, Mr Turnbull said: "In offering to stand aside Mr Brough has done the right thing, recognising the importance of the government maintaining an unwavering focus on jobs, economic growth and security".
Environment Minister Greg Hunt will cover for Mr Briggs, Finance Minister Mathais Cormann while act as Special Minister for State and Defence Minister Marise Payne will act as Minister for Defence Materiel and Science.
Mr Briggs was forced to admit last month that he injured his knee trying to tackle former Prime Minister Tony Abbott at a party after Mr Turnbull won the Liberal leadership.
However he denied being involved in the destruction of a marble table in the Prime Minister's offices._800x600.jpg?imwidth=1280)
Tony Abbott will pay for a table smashed during a party he held on the night he was dumped as PM. (AAP)
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