The Prime Minister accepted the resignation of Immigration Minister Mark Harper "with regret", Downing Street said.
Harper announced his resignation over his employment of a cleaner who was not permitted to work in the UK.
"Mark Harper offered his resignation after he was informed that his cleaner did not have indefinite leave to remain in the United Kingdom, despite having shown him documents claiming she did," a Downing Street statement read.
"He immediately notified the Prime Minister - who accepted his resignation with regret. There is no suggestion that Mr Harper knowingly employed an illegal immigrant."
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Armed police have carried out a raid apparently linked to Wednesday's deadly terror attack in Westminster.
Cheryl Grimmer vanished from inside a beach shower block in Wollongong, Australia, in 1970, when she was just three.
Pc Keith Palmer was on the front line and because of his actions, the Westminster attacker was unable to kill anyone else.