Prime Minister Malcolm Turnbull leads a chorus of government ministers calling for Sam Dastyari to leave parliament immediately.
It comes a day after the embattled senator announced he would not return next year.
"Sam Dastyari should get out of the Senate right now," he told reporters in Sydney.
"He's still taking money from the taxpayers of the country that he put second."
Senator Dastyari's dealings with wealthy Chinese businessman Huang Xiangmo have been a cause of angst for some of his federal Labor colleagues.
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Amidst attacks from the government, Labor MPs Linda Burney and Catherine King called the senator to consider his future, but Labor frontbencher Richard Marles denies it shows there is a rift in the party room.
"I don't accept the characterisation of tensions," Labor's defence spokesman said.
"Sam is a friend, a colleague, a person we've worked with over many years, a person who's made an enormous contribution to the Labor movement as the general secretary of the New South Wales branch of the ALP and as a senator in the Australian senate."
The timing of Senator Dastyari's resignation comes in the week of the Bennelong by-election, where Mr Turnbull has been campaigning with Liberal candidate John Alexander.
"It's a mark of the weakness of Bill Shorten's leadership that it took all this time for Dastyari to foreshadow his resignation," the Prime Minister said.
Ealier, education minister Simon Birmingham questioned the motives of delaying his departure.
"We had Mr Dastyari come out late in the piece, indicate a resignation that is yet to come," he told Sky News.
"There's still a last chance for Bill Shorten, he could insist Sam Dastyari to be gone by Christmas, we all know that it seems as if they want to hold the seat as a parachute for Kristina Keneally, so why not be honest about all of that and execute it nice and quickly."
Foreign minister Julie Bishop is also sceptical of Senator Dastyari's departure.
"The only reason he's hanging on to his salary into the new year is because he's holding his position open for Kristina Keneally should she not win the seat in Bennelong," the deputy Liberal leader said.
