It comes as harassment allegations continue to swirl around Westminster.
Accusations of sexual misconduct have surrounded Sir Michael in recent days after he admitted to feeling a journalist Julia Hartley Brewer's knee in 2002.
Here is his resignation letter in full:
Dear Prime Minister,
A number of allegations have surfaced about MPs in recent days, including some about my previous conduct.
Many of these have been false but I accept that in the past I have fallen below the high standards that we require of the armed forces that I have the honour to represent.
I have reflected on my position and I am therefore resigning as Defence Secretary.
It has been a privilege to have led defence over the past three and a half years.
We are close to defeating Daesh terrorism in Iraq and Syria; we have taken a leadership role in Nato; and we have secured a defence budget that will grow ahead of inflation each year.
I have the utmost admiration for the professionalism, bravery, and service of the men and women who keep us safe.
I have been fortunate in the opportunity to serve in the governments of four prime ministers, and to have played a part in education reform, including setting up Ofsted, the reduction of red tape for business, and the attraction of new investment into energy generation.
I shall continue to support the Government and to work hard for my Sevenoaks constituents.
The Rt Hon Sir Michael Fallon KCB MP
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