Interior Minister and Deputy Prime Minister Silvan Shalom said in a statement Sunday that he is stepping down. He has denied the allegations, AP reported.
Israel's attorney general has ordered police to investigate after at least seven women said Shalom sexually harassed them.
Shalom previously served as foreign minister and finance minister, and is married to a wealthy socialite from an influential Israeli family.
Shalom is the latest Israeli politician accused of sexual misconduct. The police anti-fraud chief is under investigation and another lawmaker in Netanyahu's governing coalition resigned last month, both amid similar allegations. Former Israeli president Moshe Katzav is serving a prison sentence for rape.