The Chief Minister, who called on Congress president Sonia Gandhi and other party leaders on Saturday, was told to drop the two ministers in view of the mounting demand from both the Opposition and a section of leaders within the ruling party.
After being named as an accused by the Central Bureau of Investigation (CBI) in August last year, Mr Dharmana had submitted his resignation but it was not accepted by the Chief Minister, who also refused to give permission to the CBI to prosecute him.
Ms Reddy had also offered to quit after she was named a CBI chargesheet filed last month, but the Chief Minister advised her not to do so.
Both the ministers, who had served in the Cabinet of Jaganmohan Reddy's father YS Rajasekhara Reddy (2004-09), have been accused of showing undue favours to companies which invested in Jaganmohan Reddy's business.
The Congress government had been defending the ministers, saying they only implemented the decisions taken by the Cabinet and were not the beneficiaries of the controversial orders like allotment of lands, grant of licenses and leases to companies.
The demand for dropping the tainted ministers gathered momentum after two central ministers, Ashwani Kumar and Pawan Kumar Bansal, smeared by scandal, resigned recently.