Andrew Griffiths, who has been minister for small business since January this year, quit his post ahead of a report in the Sunday Mirror, and says he is "deeply ashamed".
The newspaper features excerpts from what it claims are up to 2,000 sexual messages that the married
Conservative MP sent to two female constituents, including requests for explicit photos and videos.
The new father is also said to have offered to rent a flat to meet the women for sex - and some of the other messages are allegedly "too disgusting to print in full".
The exposé came via an interview with one of the women - barmaid Imogen Treharne - who said that while she and her friend accepted money from Mr Griffiths in return for photos and videos, she was eventually "turned off by his behaviour and hypocrisy".
"I cut it off because it was vulgar," she said.
"It was affecting my moods in real life. It affected my self-confidence, how he spoke to me. It was constant. It was pestering, it was bordering on possessive."
Mr Griffiths would transfer money into the bank account of Ms Treharne's friend - around £700 in total, the paper reports.
"I felt like I was being used for this wealthy man's gratification," Ms Treharne said.
She said she eventually began to feel like she was being "watched" by the MP for Burton, who is said to have keenly monitored her posts on apps such as Instagram and Snapchat.
It is understood that Mr Griffiths, whose wife gave birth to their first child in April, has been suspended from the Conservative Party while an investigation is carried out.
He submitted his letter of resignation on Friday ahead of the Sunday Mirror's publication.
Since being elected in 2010, Mr Griffiths has also served as a government whip and Lord Commissioner to HM Treasury.
Before entering parliament he worked as chief of staff to Theresa May.
In a statement, a spokesman for the department for business said: "Andrew Griffiths resigned as parliamentary under secretary of state for small business on Friday night for personal reasons."
In statement to the Sunday Mirror, Mr Griffiths said: "I am deeply ashamed at my behaviour which has caused untold distress to my wife and family, to whom I owe everything, and deep embarrassment to the prime minister and the government I am so proud to serve.
"I tendered my resignation as parliamentary under secretary of state for small business on Friday night.
"Following discussions today with the chief whip I have referred myself to the Conservative party's code of conduct procedures.
"I entirely accept that pending this investigation it is right the whip is withdrawn.
"I wish to apologise to my constituency association and to the people of Burton I am honoured to represent.
"I do not seek to excuse my behaviour and will be seeking professional help to ensure it never happens again.
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