Family First senator Bob Day has tendered his resignation, effective immediately.
His resignation deprives the government of a certain vote on its Australian Building and Construction Commission (ABCC) legislation.
Pressure had been mounting on the now-former senator to resign as his construction company crumbled.
As Home Australia went into liquidation, Mr Day signalled his intention to resign, but later appeared to pull back on that announcement as an investor circled his failed business.
In a statement issued on Tuesday, he said that potential investors would not be financing his company.
“While a number of offers for various parts of the Home Australia business have been received, the major investor who has been examining the group’s portfolio of assets over the past fortnight, has decided not to proceed,” he said.
“Accordingly, I have today tendered my resignation to the president of the Senate effective immediately. It has been an honour and a privilege to serve as a senator for South Australia and I am sorry it has ended this way.”
South Australia’s parliament will now have to convene a joint sitting to appoint a replacement, a process which requires seven days’ notice.
SA Parliament will not sit again until November 15, which would allow Mr Day’s replacement to attend the final two sitting weeks of Federal Parliament.
A spokesman for SA Premier Jay Weatherill said: “The government will not delay this process and will seek to arrange a joint sitting at the earliest available time.”
Deputy Prime Minister Barnaby Joyce said he hoped Mr Day’s replacement would “arrive in Canberra for work as quickly as possible”, adding it was unlikely votes would be delayed.
“I want to make sure that we proceed with these votes, all votes, as quickly as possible,” he said.
“We’ll do it on the basis that we hope that the Family First senator will be replaced as quickly as possible. There’s no reason to delay [votes] at this stage.”
Mr Day said he would now work to assist those affected by the closure of the company, which saw construction on more than 200 homes cease.
The former senator is a shareholder in Home Australia and has made personal guarantees to some of the creditors. It is not known whether he has the assets to cover those debts.
Labor and the Greens had previously criticised him for keeping his options open, arguing the former senator’s vote would be tainted and that he should be devoting his efforts to helping the families hurt by his business collapse.
The Coalition maintained that it was up to Mr Day to decide when he was going to leave the Senate and while he was in parliament his vote would count.