Special Minister of State Mal Brough will stand aside from his portfolios pending the completion of police inquiries.
Mr Brough has come under fire after federal police executed a search warrant at his home over the James Ashby affair.
Prime Minister Malcolm Turnbull said he and Mr Brough agreed he should stand aside.
"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 national security," Mr Turnbull said in a statement on Tuesday.
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.
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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.
He's faced repeated calls for his resignation from Labor.
Mr Turnbull says Finance Minister Mathias Cormann will act as special minister of state while Defence Minister Marise Payne will act as minister for defence materiel and science.
It comes moments after Cities Minister Jamie Briggs quit the frontbench over an "error of professional judgment" involving a female public servant at a bar in Hong Kong.
