Imchen put in his papers after the Election Commission authorities seized cash amounting to more than Rs.one crore and weapons from his vehicle on Monday by troopers of Assam Rifles.
"I felt imperative to tender my resignation from the Council of Ministers with immediate effect, owning moral responsibility while holding public office, even though I have committed no wrong over the incident under the law," Imchen said in his resignation letter, which he submitted to Chief Minister Neiphiu Rio.
On the other hand, the opposition Congress has sought disqualification of Imchen from contesting the assembly election for violating the model code of conduct.
The offence committed by Imchen is a very serious crime under Arms Act and the case should be investigated by the National Investigation Agency.
On Monday, troopers of the Assam Rifles seized Rs 1.10 crore in cash, five pistols, two 7.65 mm calibre rifles and 140 round of 303 rifle ammunition from Imchen's vehicle at Sathupang area in Wokha district while he was on his way to his Koridanga constituency in Mokokchung district.
This is the second big cash seizure in poll-bound Nagaland.
On Saturday, election officials seized Rs.one crore in cash from NPF candidate H. Nyemli Phom after his helicopter landed at the Assam Rifles helipad in Longleng district.
Phom, who is seeking re-election from Tamlu constituency, later claimed that the money was given to him by the party and was part of NPF funds.