The controversy "has become a distraction from the vital work this government is doing," she said in a letter to the prime minister.
Prime Minister and Miller discussed her future last night and her resignation was confirmed this day morning, Cameron's official spokesman said.
The PM said he hoped she would be able to return to cabinet "in due course".
The Culture Secretary had faced a week of pressure from the main opposition Labour Party, and from her Conservative colleagues, over payments she had claimed linked to a mortgage.
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But the lower sum was approved by a committee of lawmakers - a decision which sparked a backlash across the political spectrum and calls for changes in how complaints against MPs are investigated.
The committee also criticised her "attitude" during the investigation, which it ruled was a breach of parliamentary code of conduct.
Miller apologised in the Commons (lower house of the British Parliament), but was criticised for the brevity of her statement.
She also acknowledged that her role in "implementing the recommendations made by Lord Justice Leveson on the future of media regulation, following the phone hacking scandals, would always be controversial for the press".
The controversy is one among a series of expense account scandals to the British Parliament in recent years, leading to calls for further reforms.