Baroness Sugg, who is minister for the overseas territories and sustainable development, quit after Chancellor Rishi Sunak announced that foreign aid expenditure would be cut from 0.7 per cent of national income to 0.5 per cent.
In her her resignation letter she branded the decision “fundamentally wrong”.
The Prime Minister faces a Commons showdown with dozens of Tory MPs opposed to the cut.
Five former Prime Ministers, David Cameron, Tony Blair, Theresa May, Sir John Major and Gordon Brown have also spoken out against reducing foreign aid.
“Many in our country face severe challenges as a result of the pandemic and I know the Government must make very difficult choices in response," said Baroness Sugg in her resignation letter.
"But I believe it is fundamentally wrong to abandon our commitment to spend 0.7 per cent of gross national income on development.
“This promise should be kept in the tough times as well as the good. Given the link between our development spend and the health of our economy, the economic downturn has already led to significant cuts this year and I do not believe we should reduce our support further at a time of unprecedented global crises.”
Baroness Sugg, who was Mr Cameron’s head of operations in No10, is a minister in the Foreign, Commonwealth & Development Office. She is Special Envoy for Girls’ Education.
As a minister, her responsibilities include overseas Territories (except Falklands and Gibraltar) and polar regions, youth and education, including girls’ education, gender equality, and sexual and reproductive health and rights, and inclusive societies rights and sustainable development goals.
Baroness Sugg also warned in her letter to Boris Johnson: "Cutting UK aid risks undermining your efforts to promote a Global Britain and will diminish our power to influence other nations to do what is right.
I cannot support or defend this decision. It is therefore right that I tender my resignation."
In response Mr Johnson thanked the minister for her “outstanding service” adding that her “efforts in support of girls’ education in particular have been instrumental.”
Noble-prize winning campaigner Malala Yousafzai took to Twitter to express her disappointment at the news that foreign aid would be cut.
I am deeply disappointed @BorisJohnson and @RishiSunak that you chose to abandon the UK's 0.7% pledge to aid - when a generation of girls are leaning on that support.
I hope you will think again, find a way to reverse the cuts and protect girls education.
— Malala (@Malala) November 25, 2020
“I am deeply disappointed @BorisJohnson and @RishiSunak that you chose to abandon the UK's 0.7% pledge to aid - when a generation of girls are leaning on that support,” said Malala.
“I hope you will think again, find a way to reverse the cuts and protect girls education.”
Archbishop of Canterbury Justin Welby said the cut to foreign aid was “shameful and wrong” while Conservative former international development secretary Andrew Mitchell said it would be “the cause of 100,000 preventable deaths, mainly among children”.
Meanwhile Tory peer and former overseas development minister Baroness Chalker of Wallasey said the cut was “a sad day”.
She added: “When I think of what could be done with that amount of money, particularly now with the spreading of Covid, the spreading still of malaria and of so many other diseases in Africa which might well end up coming to Europe… it seems to me madness.
“I hope the minister… will he explain in words of one syllable just how bad this is, not only for the Government but for the country, because the country will be seen to have let down the developing world?”
When announcing the cut to the aid budget in the Commons, Mr Sunak said: “Sticking rigidly to spending 0.7 per cent of our national income on overseas aid is difficult to justify to the British people, especially when we’re seeing the highest peacetime levels of borrowing on record.”
Instead of the existing target, Mr Sunak said 0.5 per cent would be spent in 2021, around £10 billion.