"I have today, upon request from Sten Tolgfors, decided to relieve Sten Tolgfors (of his duties)," prime minister Fredrik Reinfeldt told a news conference on Thursday.
Tolgfors explained that he's been considering stepping down since last autumn, but cited the ongoing Saudi arms deal scandal as a contributing factor to his decision to resign at this time.
"There was no intrigue behind the resignation," Tolgfors said.
"I'm happy to have been a part of an armed forces for which I have the utmost esteem. But my energy has begun to wane. And the media attention of the last few weeks was the last straw."
Reinfeldt announced that current infrastructure minister Catharina Elmsäter-Svärd would temporarily step in as defence minister in the wake of Tolgfors's departure.
The prime minister also praised Tolgfors for his efforts in helping the Swedish military through a difficult time of transition which included the abandoning of conscription and a move to a more mission-based military amid difficult budget cuts.
"Sten has worked hard and in a goal oriented way and the military's budget is balanced. Sten Tolgfors deserves recognition for that," said Reinfeldt.
Reinfeldt admitted that many will assume that the decision was taken "solely because of discussions surrounding Saudi Arabia" but emphasized that discussions of Tolgfors departure had been going on for months.
Tolgfors's resignation comes amid continuing revelations about secret plans by a branch of the Swedish military to help build an arms plant in Saudi Arabia.
On Wednesday, it emerged that an official from Sweden's Defence Research Agency (Totalförsvarets forskningsinstitut, FOI) requested that documents related the secret Swedish-Saudi weapons deal not be recorded in order to “protect” Tolgfors.
The documents included a signed agreement detailing plans to build an advanced arms factory for anti-tank missiles in Saudi Arabia, according to the report in the Aftonbladet newspaper.
The revelations were the latest development in an ongoing story, first reported in early March by Sveriges Radio (SR), detailing secret plans by FOI to help the Saudis build a weapons plant.
As FOI's plans to provide assistance with the construction of the factory were considered to be on the border of what the agency had the right to do, a shell company, SSTI, was set up by an FOI official with cash borrowed from Sweden's military intelligence agency, MUST, in order hide Swedish involvement in project, dubbed Project Simoom.
It's been shown that people under Tolgfors at the defence ministry were aware of the project, but the defence minister has previously denied having any knowledge of SSTI, which was set up in prior to March 2010 when it was abandoned.
FOI's own investigation into the matter revealed information leading the agency to believe “a crime may have been committed”, prompting FOI head Jan-Olof Lind to report the incident to prosecutors, who last week launched a preliminary criminal investigation into the matter.
During Thursday's press conference, Tolgfors had little to say about the Saudi arms plant project.
"When it comes to the Saudi debate of recent weeks, I have nothing more to add. The viewpoint I had on March 9th is the viewpoint I still have," he said, explaining that several investigations into FOI's involvement with the Saudis are underway.
"I don't plan to comment more on this matter, but the issue will continue via these processes.
"I can say however that the media attention in recent weeks has hastened and facilitated my decision."
Social Democratic-leaning political scientist Ulf Bjereld said he's not very surprised over Tolgfors's resignation in light of the Saudi arms deal scandal.
"You could say that Tolgfors became too heavy a burden for the Alliance government as this business continued to develop. I think it will be something of a relief, not only for Tolgfors personally, but also for the prime minister," Bjereld told the TT news agency.
He added that it's too early to say whether or not Tolgfors will ultimately be held responsible for any wrongdoing related to the Saudi weapons plant project.
"That's something an investigation can show after the fact. There have been several questions that Tolgfors hasn't been able to answer. But it's too early to say exactly what responsibility he had," he said.
Tolgfors, of the Moderate Party, has been defence minister since 2007 after serving as Sweden's trade minister from the time the current Alliance government took office in 2006.
Tolgfors succeeded Mikael Odenberg, who resigned in September 2007 to protest against planned cuts to Sweden's defence budget.