Mrs Wong, who earlier stood down from Cabinet over the allegations, announced her resignation at a press conference this morning. She felt ongoing controversy had become a distraction for the Government.
"I've decided to resign from the Parliament following 14 years of public service," Mrs Wong told reporters.
"I have not taken this decision lightly, but I feel now is the right time for me to step down."
Mrs Wong said the allegations had put undue pressure on her family and friends.
"I strongly refute those allegations, and do not want to tie up the Governments and my time continuing to do so.
"I want to ensure the National-led Government can progress its agenda without unnecessary distraction. It has been a privilege to be the MP for Botany, and I thank my constituents for their support and patience."
Mrs Wong's resignation is effective from January 17 to avoid disrupting the Christmas break, but she will not be paid any salary after December 20. It will spark a by-election in her safe National seat of Botany.
She made the decision as Auditor-General Lyn Provost considers launching her own investigation into allegations of misuse of taxpayer funding -- using travel perks for business use -- a move that Labour has been demanding.
Mrs Wong's husband Sammy Wong was involved in a business deal while they were in China on a taxpayer-subsidised trip and Labour said there were more such trips.
An inquiry ordered by Speaker Lockwood Smith looked at her travel claims for the last 10 years and concluded there had been no other instances of the parliamentary rebate being used for business.
It also said Mr Wong did not have any business interests in China, other than a hovercraft joint venture.
Labour questioned the thoroughness of the inquiry by consultant Hugh McPhail, calling for Prime Minister John Key to refer the case to Ms Provost.
Labour leader Phil Goff said his party had more revelations, which would be made in Parliament today.
It was also putting information up on a new website, pansyfacts.co.nz, which also listed a number of questions Labour said the McPhail report had not addressed adequately.
Mrs Wong said her decision had nothing to do with those developments. The resignation was not an admission of guilt.
"I strongly refute all the allegations that have been out there... My family have paid a huge price because of my all-consuming political pursuit and the National Government should not be distracted."
Another factor was that she was unable to give her electorate 100 percent while allegations continued to be fought.
"Ironically it is quite a relief to a certain extent because I have made a decision... the Government has important issues to focus on and they should not have any distraction because of me.
"I feel relief because it weighed on my conscience ...how much I have asked my family and I believe that I am also making the right decision for the electorate."
Whip Chris Tremain confirmed a by-election would be held.
