Wednesday's resignation removed one of President Luiz Inácio Lula da Silva's closest Senate allies from the government's leadership post after police linked him to failed lender Banco Master.
A meeting with Lula preceded the move, which followed days of pressure from ruling-coalition allies who argued Wagner's continued role could hurt the president's reelection campaign.
The departure turns a banking scandal into a political liability for Lula, whose camp is already weighing the fallout for the 2026 race.