French Interior Minister Bruno Le Roux resigned on Tuesday, admitting that he had hired his two teenage daughters to do parliamentary work, but he denied any wrongdoing.
Le Roux, 51, said he did not want the investigators to look into the contracts, for which his daughters earned a total of 55,000 euros ($59,500), to "undermine the work of the government".
The TMC channel reported late on Monday that Le Roux's daughters were still in school when he first hired them, and they continued doing work for him when they were in university.
Le Roux told TMC his daughters had worked for him during their summer holidays.
Earlier on Tuesday, he was placed under preliminary investigation.
French lawmakers are allowed to hire family members as assistants, as long as they do real work.
Similar charges last week saw French presidential candidate Francois Fillon being put under formal investigation.
The action came after reports that he used public money to pay family members, including his wife, for work they might not have done.
Fillon admitted to employing his family members as parliamentary assistants but denied acting illegally.