Ukrainian Economy Minister Aivaras Abromavicius tendered his resignation on Wednesday, saying that efforts for reforms were blocked.
Abromavicius wrote in his resignation letter, which needs to be approved by the parliament on Thursday, that Ukraine's leadership lacks the political will to enact much-needed changes and has routinely obstructed reforms.
"The reason [of resignation] is the sharp escalation in efforts to block systemic and important reforms," he told reporters.
The resignation laid bare the divisions in pro-Western government, as it came in the midst of growing parliamentary displeasure with the President Petro Poroshenko's cabinet and infighting between political interests tied to powerful business tycoons.
Abromavicius alleged that unnamed powerful figures were "trying to establish control over financial resources -- first and foremost those of the Naftogaz [-state oil and energy company-] and the defence industry."
"I and my team are not ready to provide cover for the restoration of old -and the creation of new schemes [built] in the interests of particular political and business players."
Prime Minister Arseny Yatseniuk, a former ally of the president during the breaking away from Russia, said that political forces were seeking to discredit his government.
"All this fuss ..., is created with one aim: to redistribute (revenue) streams and seize power," he said in a government meeting.
"This resignation situation - it's running from the field of battle, whereas we need to fight," he said.
When Abromavicius came to office 14 months ago, he advocated deregulation and large-scale privatisation to attract foreign investment.
Concorde Capital, Ukraine based investment company economist Oleksandr Parashchiy said that "Abromavicius' announcement is a worrying signal for foreign investors."
Ukraine, suffering from grafts since its independence in 1991, was ranked 130 out of 168 countries in 2015 Corruption Perceptions Index (CPI) by Transparency International.