"I have sent in my resignation after talking to the Chief Minister after allegations of accepting Rs 4 lakh cropped up," Kushwaha told PTI.
"I requested the Chief Minister that I am a senior minister and I can not continue in the office in the wake of such serious allegations," the minister for Urban Development and Registration, Excise and Prohibition said.
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JD(U) national president Sharad Yadav told reporters that Kushwaha's resignation has been received and forwarded to the Governor for acceptance.
"As soon as we came to know about the sting operation, I had a meeting with Chief Minister Nitish Kumar and state party president Bashishtha Narayan Singh. We later spoke to Awadhesh Kushwaha who tendered his resignation," Yadav said.
He said Kushwaha will not be the JD(U) candidate for Pipra assembly constituency in East Champaran district where the party will field another nominee.
Kushwaha, who was seen accepting wads of currency notes in the video, purportedly for extending favours to a contractor, called it "a high-level" conspiracy hatched by his rivals.