Initial reports had said that more than 100 people were kidnapped after armed men in police uniforms raided the ministry on Tuesday morning in one of the largest mass abductions of Iraq's sectarian conflict.
Dhiab's temporary resignation signals a deepening row within the government.
"I have suspended my participation as a minister with the government until those people who have been kidnapped are released," he said.
"If I can't save and protect the lives of the people in my ministry, whether they are professors or employees or students, there is no use my staying in the ministry."
The hostages were driven in lorries towards the mainly-Shia area of Sadr city after the armed men occupied all four floors of the building, put the women into separate rooms and handcuffed all the men, officials and eyewitnesses said.
Several police officers from the al-Karradah district are being questioned over the incident.
Nuri al-Maliki, the Iraqi prime minister, had played down the incident and stated that most of the hostages seized at the ministry building had been freed.
The kidnapping has put further pressure on Maliki's government to disband militias involved in sectarian violence.
Academics are increasingly being singled out in sectarian violence, and thousands of professors and researchers have fled from the country.
At least 155 education workers have been killed since the war began and a university dean and a Sunni geologist were murdered in recent weeks.
Ministry workers had not kept attendance records and an unknown number of visitors were in the building, making it hard to establish exactly how many people had been snatched.
"They beat us and insulted us and after that they freed us"
Yahya Alwan, ministry worker
Tareq Hassan, the brother of one of the hostages said that he had not heard any news about his brother, a Sunni, since he was seized from his office. "I don't know if he's alive or dead," he said.
The father of another Sunni hostage said: "We're already receiving mourners at our home.
"Every day I used to watch the news and hear about all these bodies found. I feared the day would come for my son," said the man, who declined to give his name for fear of reprisals.
Yahya Alwan, a Shia assistant manager in the ministry, said after he was released on Tuesday afternoon: "They beat us and insulted us and after that they freed us."
Amid suspicions of police complicity in the kidnapping, the interior minister hauled in police chiefs on Tuesday to explain how dozens of gunmen in police uniforms swept into the ministry and rounded up hostages.
Sunnis have blamed many of the kidnappings on armed groups from the now-dominant Shia parties, who control the interior ministry.
The higher education ministry is headed by a member of the main Sunni Arab political bloc.