Iraqi State Minister Adnan al- Janabi resigned on Thursday in protest against his brief detention by US forces, an Iraqi official told Britain's BBC network.
Janabi was handcuffed under US detention for 30 minutes near the Green Zone, home to the interim Iraqi government and US and British embassies.
The US military command in Baghdad made no comment on the detention.
Iraq's interim Prime Minister Iyad Allawi tried to persuade him to withdraw the decision but failed, said the official on condition of anonymity.
Janabi, a Sunni tribal notable, has been chosen to be a member on the Allawi-led list of over 240 candidates running for parliamentary seats in the upcoming elections due on Jan. 30.
His resignation came less than three weeks ahead of the landmark elections, which Allawi's government has insisted on going ahead on time despite calls for postponement and rampant insurgency to derail them.
Iraqi officials often complain about US soldiers' defiance and indifference when they are on duty at checkpoints at the entrances of the Green Zone and inside it.
Last year, two members of the defunct interim Governing Council were shot and injured by US soldiers inside the zone. The soldiers then underwent inspections and said they mistook the two for suspected insurgents.