Lad's resignation comes just two days before the winter session of the legislature is slated to begin on Monday, with the opposition Bharatiya Janata Party (BJP) and Janata Dal (Secular) preparing to put the government on the mat over the issue.
The move is seen as an attempt by the government to disarm the opposition.
The iron ore mining company in which the 38-year old Lad is partner is linked to another firm owned by his kith and kin which allegedly indulged in illegal mining.
Lad had repeatedly denied that his company was engaged in illegal mining.
