Mr Shalom, who is also stepping down from his position as deputy prime minister, said he was doing so to spare his family any more suffering.
The attorney-general has ordered a probe into claims made against Mr Shalom by several women. Mr Shalom has denied any wrongdoing.
Israel has seen several similar high-profile cases in recent years.
The police anti-fraud chief is under investigation for sexual misconduct and last month another MP in the governing coalition, Yinon Magal, resigned amid sexual harassment allegations.
In 2011 the former President Moshe Katsav began a seven-year jail sentence for rape.
Some media reports suggest that Mr Shalom’s replacement in the Israeli parliament could be Amir Ohana, who would become the first openly gay MP from the right-wing Likud party.
Source: BBC
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