Health and Human Services Secretary Tom Price faced public backlash over his use of private jets using taxpayer funds.
The flights cost hundreds of thousands of dollars. Price had earlier voiced regret and offered to partially repay the government for his travel. But that did not suffice, with him leaving office nearly eight months after assuming the reigns at HHS.
Several other senior officials have either been fired or quit during Trump's nascent administration, but Price is the first cabinet-level official to resign.
In his resignation letter to Trump, Price said he regrets "that the recent events have created a distraction from" achieving the department's objectives.
"Success on these issues is more important than any one person," he wrote. "In order for you to move forward without further disruption, I am officially tendering my resignation."
Speaking earlier to reporters, Trump said he was "not happy" with Price, but called him "a very, very fine man".
"I was disappointed because I didn't like it cosmetically or otherwise," Trump said before leaving the White House to spend the weekend at his New Jersey golf course. "This is an administration that saves hundreds of millions of dollars on renegotiating things, on new trade deals that will be - you'll be seeing the results very soon."
Trump had earlier been coy about the fate of his health secretary, saying when asked about Price's fate "we'll see".
The controversy prompted a government-wide investigation of top officials by the House Oversight and Government Reform Committee.
Committee Chairman Trey Gowdy and Ranking Member Elijah Cummings sent letters to the White House and 24 government agencies seeking information on the travel of senior officials.
Under U.S. law, "official travel on the part of federal employees must be ‘by the most expeditious means of transportation practicable’ and ‘commensurate with the nature and purpose of the [employee’s] duties,’ and by no means should include personal use,” the letter said.
Trump intends to designate HHS official Don J. Wright to serve as acting secretary, according to the White House.