"Raja Bhaiya has tendered his resignation and it has been accepted. The investigation is on and law will take its own course," Samajwadi Party chief Mulayam Singh Yadav told reporters outside parliament in the national capital.
The food and civil supplies minister was charged with conspiracy to kill Deputy Superintendent of Police Zia-ul Haq.
Zia-ul Haq was killed with two others in Balipur village in Pratapgarh district, over 100 km from Lucknow Saturday night, during violence that followed the murder of the village head Nanhe Yadav.
Besides Raja Bhaiya, seven of his associates were also booked.
Parveen, the wife of the slain officer, has accused the minister of conspiring to kill her husband as he was investigating a "sensitive matter".
Zia-ul Haq was first attacked by an angry mob and then shot in the leg and chest from a point blank range, an official said.
The case was registered Sunday evening after Zia-ul Haq's family refused to allow his funeral until a case was registered against the controversial minister.
The minister's close associates who have been booked in the case include panchayat head Gulshan Yadav and driver Rohit Singh. They have been charged with murder.
Chief Minister Akhilesh Yadav has announced ex-gratia payment of Rs.20 lakh to the family of the deceased police official and transferred Pratapgarh Superintendent of Police (SP) Anil Rai and posted L.R. Kumar as the new district police chief.
The incident is set to create fresh trouble for the Akhilesh Yadav government, which completes a year in office March 15.
Law and order has become a bane for the state government with a spurt in crime in recent times, even against police officials.
With the state assembly session under way, political parties are set to corner the chief minister Monday in the state assembly.
Congress leader and former Uttar Pradesh chief minister Narayan Dutt Tiwari has blamed "administrative failure" for the "tragic event".
Senior Congress leader Rita Bahuguna Joshi also slammed the government for its "inefficiency" and "lack of administrative acumen" and said such an incident was reflective of the situation in Uttar Pradesh.
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