Sir Michael Fallon has resigned as Defence Secretary, days after he apologised for touching a journalist’s knee.
The Sevenoaks MP admitted he had "fallen below" acceptable standards and had since "reflected on my position".
He wrote in a letter to Theresa May: "A number of allegations have surfaced about MPs in recent days, including some about my previous conduct.
"Many of these have been false but I accept that in the past I have fallen below the high standards that we require of the Armed Forces that I have the honour to represent.
"I have reflected on my position and I am therefore resigning as Defence Secretary."
The PM responded: "I appreciate the characteristically serious manner in which you have considered your position, and the particular example you wish to set to servicemen and women and others."
She also praised his "long and distinguished" career in Parliament and added: "On behalf of all those you have helped throughout your time in Government, I thank you for your service."
Sky News Political Editor Faisal Islam said: "This is now very, very serious for the Government, who will hope to limit the fallout."
It comes as a number of Tory MPs face allegations of inappropriate sexual behaviour, including Mrs May's deputy, Damien Green, who called the claim against him "completely false".
On Monday, Sir Michael apologised for putting his hand on radio host Julia Hartley-Bewer's knee at a conference dinner in 2002.
Ms Hartley-Brewer said she "absolutely didn't expect the news".
She told Sky News: "I'm incredibly shocked. If this is about knee-gate, him touching my knee 15 years ago and me not having any issue with it at all, this is the most absurd resignation of a Cabinet minister ever.
"However I don't think that is the reason.
"I doubt very much if one of the standards they require in the armed forces means that no man in the military has ever touched the knee of a younger woman."
Jeremy Corbyn told Sky's Jon Craig the resignation news was "amazing". When asked if he would do an interview, the Labour leader commented: "Not yet."
Former deputy leader Harriet Harman also wrote on Twitter: "Well done, Theresa May."
While Lib Dem MP Alistair Carmichael said the Cabinet was "falling apart like a cheap piece of flat-pack furniture".
But Tory backbencher Nadine Dorries tweeted: "Fallon should stay as SoS. Another role. He expects the best from our armed forces. Seems to feel he's let them down. Job swap."
Sir Michael became Defence Secretary in July 2014, after ministerial roles in the Treasury, and Education and Energy departments spanning four prime ministers
He became MP for Darlington in 1983, but failed to win re-election nine years later. He then moved to Sevenoaks, the seat he has represented sine 1997. His majority was 22,000 at the June 2017 general election.
As questions over "allegations" against MPs brewed in Parliament, Theresa May was accused of failing to act over warnings about historical claims of a Westminster sex scandal cover-up.
Labour MP Lisa Nandy said she told the then-Home Secretary years ago about allegations Tory whips had "used information about sexual abuse to demand loyalty from MPs".
A Downing Street spokesperson responded that "the matters raised were dealt with".
Tory MP Gary Streeter mused in a tweet on Wednesday afternoon: "Feels increasingly like 1992-97 parliament: no majority, no money, ripping ourselves apart over EU. That lasted 5 years. Oh dear."