Liberal Senator Arthur Sinodinos resigned as Assistant Treasurer in the Abbott Government as an Independent Commission Against Corruption investigation into a company he used to chair continues.

The move could prompt a cabinet reshuffle, and opens the door for the appointment of a female minister to quell criticism of the male-dominated leadership team.

In a statement, Senator Sinodinos said his resignation will take effect at close of business on Friday. He said he expected Prime Minister Tony Abbott to announce his replacement on Sunday.

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The NSW ICAC investigation in which Senator Sinodinos has been called as a witness will reportedly be delayed until March or beyond.

The Senator continues to deny any wrongdoing.

“While I am extremely disappointed by this further delay, I am confident that when the reports are finally released, I will not be subject to any finding of corrupt conduct or illegality.

The reason for the resignation is to allow the Prime Minister to appoint a cabinet replacement in time for next year’s budget, the Senator said.

“The government needs a full-time Assistant Treasurer for the preparation of next year’s budget,” he said.

Prime Minister Tony Abbott has accepted the Senator’s resignation and confirmed he will announce a replacement “in the next few days”.

“Knowing Arthur as I do, I am confident he will be vindicated,” he said in a statement.

The resignation comes in response to an investigation into alleged corruption involving private company Australian Water Holdings, of which Senator Sinodinos was a former chairman.

The Senator initially stood down from his portfolio in March pending the outcome of the investigation.

The move will allow Prime Minister Tony Abbott to appoint a new assistant treasurer, and potentially make broader changes to his cabinet.

Talking to Sky News, Senator Sinodinos said the past six months have been frustrating.

“Well it has been frustrating because it’s a bit like living in a shadow place between the front bench and the back bench,” he said.