Also on Monday, Yukiko Sakamoto, the vice-foreign minister, also stepped down after acknowledging that her support group faked funding reports from 2004-2005, Kyodo reported.
The new scandals hit Shinzo Abe's government just as it appeared to be recovering from July 29 elections in which the opposition took control of the upper house of parliament.
Support for Abe had jumped some 10 percentage points following the naming of a new cabinet last Monday.
The prime minister's previous cabinet was plagued by scandals and gaffes.
Third to go
Abe's first appointee to the farm portfolio committed suicide over a separate scandal.
The second was fired over reports of discrepancies in his political funding records.
Two other ministers in Abe's first cabinet, which was formed a year ago, were also forced to resign for gaffes or scandals.
Abe's public support ratings rebounded to around 40 per cent according to some media surveys after he named the new cabinet packed with political veterans.
But doubts about his leadership capability remain.
Endo had failed to disclose his dealings with the farmers group to the prime minister before his appointment and the farmers group, in his constituency in northern Japan, has not yet returned the money to state coffers.
He had apologised to the public on Saturday, but said then that he did not intend to resign.
Mizuho Fukushima, head of the tiny opposition Social Democratic Party, had threatened to pursue a censure motion if Endo did not step down. Opposition parties have the votes to pass a censure motion in the upper house.
The motion would not have been binding, but would have been an embarrassment.
Naoto Kan, a senior executive of the main opposition Democratic party, had also criticised Endo's actions and threatened to call him to testify in parliament.
Separately, pressure also came from Endo's ruling camp peers.
Kaoru Yosano, the chief cabinet secretary, said: "He should explain in a more understandable manner if an explanation is sought."
The head of the junior partner in the ruling coalition sounded a note of angry frustration over the fresh scandal.
"Frankly, it is shameful and regrettable that such problems keep emerging one after another," Akihiro Ota, leader of the Buddhist-backed New Komeito, said.