Minister for Science and Technology Azam Khan Swati was facing a case in the Supreme Court over allegations that he influenced the transfer of former Islamabad Inspector General of Police Jan Mohammad.
The government was under pressure from opposition for keeping a minister who was being probed.
"To uphold my moral authority, I sent my resignation to the Prime Minister (and told him) that I cannot work under these conditions," Swati said.
The senior police official was transferred for not taking telephone calls of Swati after his son registered a case against some slum dwellers for allegedly trespassing into his family's land.
The case was highlighted by media as a blatant interference by the minister in police affairs and Swati's fate was almost sealed when Chief Justice Saqib Nisar took a suo motu cognisance of the case in November.
A preliminary investigation ordered by the top judge found Swati's family responsible for the quarrel with the poor slum dwellers.
Another probe was launched to investigate his role in the police chief's transfer and misuse of powers.
The judge, during a hearing, threatened to start proceedings against the minister under Article 62 of the Constitution which was used to disqualify former prime minister Nawaz Sharif.
Khan won elections on promises to root out corruption.
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