Premier Darrell Dexter said he accepted Percy Paris's resignation after the incident.
Earlier Thursday, a spokesman for Halifax Regional Police confirmed they were investigating an alleged assault at the legislature, but wouldn't provide details.
Police later issued a statement saying they charged a 65-year-old man from the Windsor Junction area with uttering threats and assault after receiving a complaint at the legislature.
The statement did not identify the man but said he was released from custody and will appear at Halifax provincial court at a later date.
Dexter thanked Paris for his contributions in cabinet.
"Mr. Paris offered his resignation from cabinet following an incident at the House of Assembly," he said in a statement.
Paris says he had a "heated exchange" with Liberal Keith Colwell while the two were near the doorway of the members' washroom.
Paris declined to discuss details of what happened, adding that he would first discuss the matter with police.
Paris said he momentarily lost his temper.
"Things reached a point where I lost my composure for a few brief seconds," said Paris.
"I regret I lost my cool for a few seconds."
Colwell, the Liberal member who represents Preston, a Halifax-area riding with a large number of black constituents, said what happened wasn't proper behaviour.
Later in the evening, he declined further comment, saying he is consulting a lawyer.
Paris said he planned to meet Thursday evening with investigators.
"I would say Mr. Colwell and I had an animated exchange outside of the house," he said.
Paris said discussions in the legislature during the day concerning the province's black community irritated him.
"There were a lot of things that were said today that don't set well with me," said Paris, who is black.
Before the incident, Colwell raised questions in the legislature about a mobile mammography unit, accusing the government of neglecting to ensure it would visit his riding.
He asked the premier to apologize to the people of Preston, saying it was "a black community that's not going to get the service this year because it was left off the government's website."
Paris wouldn't say whether Colwell's questions were the source of his irritation.
Dexter said Paris would continue to serve as the member for the Halifax-area riding of Waverley-Fall River-Beaverbank.