Deputy Prime Minister and Minister for Health and Population Upendra Yadav has resigned from his post.
Yadav, who is also the chairman of Janata Samajwadi Party (JSP) Nepal, tendered his resignation on Monday morning.
Yadav told Setopati that they have quit the government.
Minister of State for Forests and Environment Deepak Karki, who is also from JSP Nepal, also tendered his resignation.
Nawal Kishor Sah Sudi, who was appointed forest minister from JSP Nepal, recently joined the Ashok Rai-led Janata Samajwadi Party.
Seven lawmakers including Rai broke away from the Yadav-led JSP Nepal and formed Janata Samajwadi Party last week.
Ruling parties CPN-UML and CPN (Maoist Center) quit the Madhes government headed by JSP Nepal on Sunday.
JSP Nepal has called a central committee meeting on Monday to discuss the general convention and the changed political scenario.