French President Emmanuel Macron's office said in a statement late on Tuesday that Transport Minister Élisabeth Borne would replace François de Rugy as Environment Minister.
De Rugy resigned on Tuesday following a week of reports by an investigative website about his high spending on private lobster dinners and costly renovations of his ministerial residence.
In a posting on his Facebook page, François de Rugy said he had handed his resignation to Prime Minister Édouard Philippe because the "effort required to fight the accusations" was undermining his ability to do his job.
De Rugy has denied all wrongdoing, but the reports have made it hard for him to continue a series of key reforms, including the restructuring of indebted state utility EDF.
The scandal has also reinforced criticism of President Emmanuel Macron's government as being elitist, as it struggles to end months of Yellow Vest protests, which marred the traditional Bastille Day parade on Sunday.
(FRANCE 24 with AFP)