The controversy surfaced earlier this month when Chiang was linked to a scholar whose papers were retracted by a British publisher following allegations he used bogus identities to peer review his work.
Chiang appeared as a co-writer in five out of 60 articles that were withdrawn.
"After reflection overnight, in order to safeguard my own reputation ... I've decided to resign as the education minister," Chiang told reporters as prosecutors launched an investigation into the scandal.
The resignation deals another blow to the beleaguered Ma Ying-jeou administration, which has been beset by a series of protests earlier this year against a controversial services trade pact with China and a contentious nuclear power plant.
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His name appeared as a co-writer in five articles written by local academic Peter Chen in the last four years.
Earlier this month British publisher Sage withdrew Chen's articles from the Journal of Vibration and Control, alleging he had been able to review his own work by using peers that did not exist.
In a press conference yesterday Chiang tried to distance himself form the scandal saying he did not know Peter Chen personally. Instead, he said he had advised Chen's twin brother Chen Chen-wu in his doctoral thesis about 10 years ago.
Chiang's explanation failed to convince critics and pressure mounted on the minister to explain how it was possible not to know Peter Chen given Chiang's name appeared on co-written articles.
The leading opposition Democratic Progressive Party called on Chiang to step down, which he did 24 hours later.