A new communities minister will be appointed in the New Year following the resignation of Malcolm Chisholm.
Malcolm Chisholm took a stand over his opposition to Trident
Mr Chisholm resigned from the Scottish government after voting with the SNP over the replacement of Trident.
He was one of four Labour members who supported the SNP's motion opposing the replacement of the nuclear submarines.
Mr Chisholm said his decision had been a "matter of principle". Charity Shelter also praised his commitment to his communities portfolio.
The Scottish Parliament failed to agree a position on the future of the Clyde-based Trident fleet.
Mr Chisholm, whose successor will be announced in the New Year, has already spoken out against the UK Government's plans to replace the nuclear submarines, based at Faslane.
The one-time health minister has also been critical of the Iraq war and the removal of failed asylum seekers using dawn raids.
The MSP for Edinburgh North and Leith said he was unable to accept Labour's position on Trident, but would remain "completely united" with the party on other policies.
In his resignation letter, he told First Minister Jack McConnell: "In those circumstances, notwithstanding the fact that it is a reserved issue, I realise that it is not tenable for me to continue as one of your ministers."
Mr McConnell said Mr Chisholm had made a substantial contribution to government, but added: "I understand Malcolm's position and have accepted his resignation."
Mr Chisholm told BBC Scotland that signalling his opposition to Trident was important.
"It was not easy for me, in fact it proved impossible for me to have said one thing a couple of weeks ago and vote the opposite of it today," he said.
Following the announcement, Jacqui Watt, chief executive of the Scottish Federation of Housing Associations said she appreciated Mr Chisholm's reasons for resigning.
She said: "We look forward to the same constructive arrangements with the in-coming minister."
Homeless charity Shelter Scotland took the opportunity to urge the new communities minister to increase funding for affordable housing.
Director Archie Stoddart said: "Malcolm Chisholm has shown strong personal commitment to his portfolio during his time as communities minister."
'Out of touch'
Scottish National Party deputy leader Nicola Sturgeon congratulated Mr Chisholm for taking "a principled stance" and described his resignation as a "body blow" for the first minister.
"This whole issue demonstrates just how out of touch he is with the Scottish public and even members of his own party," she said.
The SNP's motion was defeated by 72 to 45, while three amendments - lodged by Labour, the Liberal Democrats and the Conservatives - were also defeated.
Labour rebel Marlyn Glenn, who backed the SNP along with party colleagues Bill Butler and Elaine Smith, said: "I very much regret that Malcolm felt the need to resign from the cabinet. He will be sadly missed."