Ravi Karunanayake, who was the finance minister at the time the deals took place, denied the allegation but told Parliamentthat he is resigning from the Cabinet to "set an example" to others and protect the government. He said he would continue as a lawmaker.
He has previously said the apartment deal was handled by his family and he was unaware of its contents or parties involved.
Although Karunanayake has not been charged, opposition lawmakers had been calling for his resignation over conflict of interest and ethical issues.
In his statement to Parliament, Karunanayake said there was an attempt to destabilise the government using the allegations against him.
"I will not allow such a coup to topple our government. I resign with pride ... setting an example," he said.
The businessman is being investigated bya presidential commission for allegedly having inside information about bond transactions with the Central Bank.
President Maithripala Sirisena, who came into power promising to end corruption, has been under pressure to act against Karunanayake.
A special commission of inquiry appointed by Sirisena is investigating allegations of corruption related to treasury bonds issued during the period from February 2015 to March 2016.
Payment of the lease for Karunanayake's penthouse by the businessman surfaced during commission hearings.