Badran, a Shia, told a news conference on Thursday that he had spoken to administrator Paul Bremer.
"He (Bremer) said that the problem was that the interior and the defence ministers could not both be Shia... So I am resigning my position and I hope that by my decision, balance will be restored to the ministries in Iraq," he said.
The defence minister's position was created only this month.
US officials were taken by surprise at the announcement,
and more than one hastily left the news conference to make
calls. A US official said Bremer was meeting other officials and would make a statement later.
The official said he had no information about dissatisfaction within the US-led administration with Badran's performance, or about whether Bremer really had problems with both the interior and defence ministers being Shia.
An uprising by Shia leader Muqtada al-Sadr’s supporters has swept across Iraq this week, leading to deadly clashes with occupation troops. More than 300 Iraqis and 35 occupation soldiers have been killed since Sunday.
In an interview last month Badran, who held one of the key
internal security portfolios, told Reuters he did not think his
ministry was ready to take over responsibility for security
after the 30 June handover.