The state's Chief Minister Omar Abdullah accepted his resignation, official sources said.
"I have received Sajaad Kitchloo's resignation asking to be relieved of his responsibilities pending the outcome of the judicial inquiry," Omar wrote on micro-blogging site Twitter.
"I am forwarding the same to the Hon. Governor (N N Vohra) with the recommendation that it be accepted," he added.
The ongoing clashes has claimed at least three lives and around 20 people have been injured so far.
Meanwhile, Omar ordered judicial inquiry into the the communal
"In order to establish the truth behind the Kishtwar violence and what followed, the State Government has decided to order a Judicial inquiry", he wrote on his Twitter account.
The Parliamentary proceedings were also disrupted today as there was uproar over Kishtwar riots among many other issues.
BJP had demanded that Kitchloo be removed pending an impartial inquiry on his alleged role in the riots in Kishtwar.
Kitchloo, who was induced in the cabinet early this year, had earlier told reporters he would submit his resignation to Abdullah.
Kichloo, who represents the National Conference from Kishtwar assembly constituency in the 87-member state legislative assembly hails from Kishtwar town, which witnessed communal riots last week.
He had come serious criticism for mishandling of the Kishtwar communal flare-up.
Kitchloo told reporters here that he was going to meet Abdullah, who holds the home portfolio, to submit his resignation.
He however questioned the Bharatiya Janata Party's (BJP) right to demand his resignation, asking: "Did Narendra Modi resign after the Gujarat riots?"
"Some political parties are trying to malign my name. I am innocent and have done no wrong,"he said.
(With Agencies' inputs)