Science minister Lord Sainsbury - Labour's biggest individual donor and a close ally of Tony Blair - has resigned, citing personal reasons.
Lord Sainsbury said he would return to business and charity work
The supermarket billionaire was one of 48 people questioned by police over the "cash-for-honours" affair.
He was also cleared of breaching the ministerial code in April after failing to disclose a £2m loan to Labour.
Lord Sainsbury - who is replaced by Malcolm Wicks - said this had "no connection" with his resignation.
Prime Minister Tony Blair said the science minister had been a "huge asset" to the country.
Mr Wicks is leaving the post of energy minister to replace Lord Sainsbury.
Trade and Industry Secretary Alistair Darling will take responsibility for energy policy.
Chancellor Gordon Brown denied Lord Sainsbury was "leaving a sinking ship", telling BBC News 24 the peer had "always made it clear he would leave after a certain time".
"He wanted to get back to his charitable work in particular," added Mr Brown.
Lord Sainsbury earlier revealed he would be carrying out a review of government science policy for Mr Brown over the next few months.
The former chairman of the Sainsbury supermarket empire was ennobled in 1997 and became science minister the next year.
He is believed to have donated up to £16m to the Labour Party since Tony Blair became leader in 1994.
Lord Sainsbury told the BBC he would not be returning to work for the supermarket.
'Time is right'
He said: "I've done eight years in the job.
"I've achieved most of what I can achieve, and I think now is the time really to get back to all my other business and charitable activities, which I've not been able to do during the last eight years."
Lord Sainsbury apologised earlier this year about the £2m undisclosed loan, saying he had confused it with a declared donation he had made.
On being quizzed over the "cash-for-honours" affair, he told the BBC: "I was interviewed by the police as a witness as I had also given a loan. But of course I am not a fund raiser for the party.
"I have had a peerage for eight or nine years, so there is no question of buying a peerage."
Lord Sainsbury said he had "always been rather a keen supporter of more public funding of parties".
"I think it just removes the whole of government from the issue of raising funds," he added.
Mr Blair said the minister had "worked tirelessly to push the case for science within government".
"It is in no small part down to him that this country's science base is in better shape than for decades, something of vital importance for this country's future.
"His contribution to government will have a huge impact in future decades and we owe him a real debt of gratitude."
In the mini-reshuffle caused by Lord Sainsbury's resignation, environment minister Ben Bradshaw becomes a minister of state and Lord Truscott is made an unpaid parliamentary secretary at the Department of Trade and Industry.
Diana Warwick, Chief Executive of the Vice-chancellors' organisation, Universities UK, said: "We are sorry to hear this news.
"Lord Sainsbury's period of office covered a time of unprecedented investment in, and support for, the UK's science base.
"David Sainsbury has been a great champion of research in higher education, and will be a serious loss to UK Science and to the university sector."