Junior Minister Jamie Briggs has quit the frontbench due to an "error of judgement" towards a female public servant after a boozy night out on an official trip to Hong Kong.
Speaking in Adelaide, Briggs said he would step down from his role as Cities Minister after the incident at a crowded Hong Kong bar.
He said while nothing inappropriate or illegal occurred, he was quitting his post after consultations with Prime Minister Malcolm Turnbull.
"At the conclusion of the dinner, which I paid for personally, we went to a popular - and as it transpired, very crowded - bar for drinks, during which we interacted between the three of us and with others in what I believed at the time was an informal manner," Briggs said on Tuesday.
"At the conclusion of the evening, the public servant left to return home and my Chief of Staff and I returned to our hotel together.
"At no point was it my intention to act inappropriately and I'm obliged to note for the record that nothing illegal has been alleged or in fact did occur."
Here's Jamie Briggs letter of resignation to the PM pic.twitter.com/g8dCPUTM2K— Adam Todd (@_AdamTodd) December 29, 2015
Briggs said he had not intended to cause offense but that the public servant raised concerns about his behaviour in the days following the incident.
He said on reflection his behaviour had not met the high standards demanded of a minister.
"The proper course of action for me is to resign. This was an error of professional judgment," he said.
He said the Prime Minister told him the behaviour was not what he expected from a minister.
Jamie Briggs making a special mention how he's decided not to name the public servant who complained about him. The least she should expect.— Latika M Bourke (@latikambourke) December 29, 2015
Briggs was nearly scrapped from the Ministry after a reshuffle of Malcolm Turnbull's Cabinet earlier this year.
The federal member for Mayo was previously the Assistant Minister for Infrastructure and Regional Development.
Briggs joins Mal Brough, the Special Minister of State, in stepping aside from his federal ministerial portfolios on Tuesday.
Brough is stepping down pending the completion of police investigations into the so-called Asby-gate affair.
Following the resignations, Turnbull issued a statement saying Environment Minister Greg Hunt would act as Minister for Cities while Finance Minister Mathias Cormann would fill in as Special Minister of State.
Briggs' announcement comes just over three months since he was photographed in a wheelchair after a night of partying with Tony Abbott.
While he initially claimed to have sustained the knee injury from running, Briggs ended up confessing it was from trying to tackle Abbott at a party following the Turnbull leadership coup.
Labor's deputy leader Tanya Plibersek said the government should have moved earlier to dump Briggs and Brough.
She said it was "laughable" to suggest that Turnbull only found out about the Hong Kong bar incident on Tuesday.
"The government is highly cynical and wants to slide back into government without being scrutinised," Plibersek told reporters in Sydney.
"The fact that he (Turnbull) has waited so long to call them to task ... shows an incredible poor lack of judgment."
She said the ministers' resignations were part of a government effort to "take out the trash" when most Australians had their "feet up on the banana lounge".