Labour's Shane Jones says he has no option but to stand down while an investigation has been called for into actions he took as a government minister so he can clear his name.
In 2008, Mr Jones overrode advice from officials and approved citizenship for Chinese businessman Yan Yong Ming, also known as Yang Liu and to politicians as Bill Liu, who is on trial for immigration fraud.
On Wednesday, Labour leader David Shearer asked the Auditor-General to investigate Mr Jones' decision to approve the citizenship and the list MP has been stood down from the party's front bench and portfolio responsibilities.
Mr Jones told Radio New Zealand's Checkpoint programme on Wednesday he was part of the decision to ask the Auditor-General to investigate and he has been unable to respond to comments made in the fraud case.
"There had been reports of what the officials had said, I've been unable to respond to them because the court case was on ... and I need an opportunity to put my side of the story forward.
"Anyhow, this is the decision that the leader has taken and I support him in it. I've offered to stand down for whatever period of time it takes."
David Shearer said he believes Mr Jones followed a proper process but, given statements made in and outside of court and the public interest, an independent agency should review the matter.
Mr Shearer told Checkpoint programme on Wednesday that no new information has come to light and the party asked for an investigation because Shane Jones feels he has been unable to clear his name.
"Yesterday he made a series of statements about what he did and why he did it. He felt that the allegations are still there; they are certainly pulling him into question and so he felt that the best way forward - and I encouraged him to do this - is take it to the Auditor-General."
David Shearer said he stands by his decision not to stand Mr Jones down earlier.
Shane Jones' portfolios are Associate Finance spokesperson, regional development, economic development (Maori) and fisheries.
An Auckland High Court judge will release his decision on the Yan case on Thursday.