Michael Moore has been replaced by Alistair Carmichael as secretary of state for Scotland as a reshuffle of Conservative and Lib Dem ministers in the coalition government takes place.
Mr Moore, a leading figure in the No campaign for the Scottish independence referendum, said he was "disappointed" but respected the decision.
Ex-journalist Esther McVey is among several female Tory MPs to be promoted.
Ed Miliband is also planning a shake-up of Labour's frontbench team on Monday.
The BBC understands Mr Moore is the only cabinet minister on the Lib Dem side of the coalition to lose his job in the reshuffle, which is expected to focus on middle-ranking ministerial positions.
Mr Moore said the future of the UK was "bigger than one individual or party" and he believed those wanting Scotland to remain were "winning the argument".
In other changes so far:
- Sajid Javid is promoted from junior Treasury minister to Financial Secretary to the Treasury
- Northern Ireland minister Mike Penning is promoted to minister of state for Work and Pensions
- Greg Hands is promoted to deputy Conservative chief whip
- Greg Clark moves from the Treasury to Cabinet Office
- Fisheries Minister Richard Benyon among those to resign
Mr Carmichael, the MP for Orkney and Shetland, has been the Lib Dems' chief whip and a government deputy chief whip since the formation of the coalition. He was previously the party's Scottish spokesman.
- Lib Dem Alistair Carmichael becomes Secretary of State for Scotland
- Don Foster becomes Lib Dem Chief Whip and deputy government chief whip
- Conservative Esther McVey promoted to employment minister
- Conservative Sajid Javid becomes financial secretary to the Treasury
- Conservative Mike Penning becomes minister of state at Work and Pensions
- Conservative Greg Hands become deputy Conservative chief whip
The BBC's chief political correspondent, Norman Smith, said the move could be explained by Prime Minister David Cameron and Deputy Prime Minister Nick Clegg's desire to have a more combative figure in the job to take the fight to SNP leader Alex Salmond.
In his resignation letter, Mr Moore said it was a "hugely important time" in Scottish politics and that he was "grateful" for having been able to make the case for Scotland to remain part of the UK.
In his response, Mr Clegg said Mr Moore had done a "formidable" job but that he believed "we now need to draw on different experience in the final year running up to the referendum itself".
Mr Carmichael has been replaced in his previous role by Local Government minister Don Foster.
In a tweet, Mr Cameron confirmed that a reshuffle was under way, with news on individual appointments being broken via social media.
Norman Smith said that up to 10 ministers could be changing jobs, with promotions expected for a number of female MPs.
Among the changes, former broadcaster Esther McVey has been promoted from her role as junior minister in the Department of Work and Pensions to minister of state, with responsibility for employment.
Standing downAmong those to resign include Fisheries Minister Richard Benyon. He tweeted: "On back benches! Three and half really fun years with much achieved. Really appreciate time working with outstanding ministers and officials."
A number of Conservative ministers have resigned from the government in recent days in anticipation of the reshuffle, with Mr Cameron looking to reshape his lower and middle ranks.
Simon Burns, John Randall and Chloe Smith have all announced they are standing down.
Mr Burns' successor as transport minister will have day-to-day responsibility for selling the HS2 high-speed rail link to the public, amid growing reservations about its cost and economic benefits.
Amid talk that Labour could cancel the £50bn project if it wins power after the next election, The Guardian reported that shadow transport secretary Maria Eagle, a strong supporter of the project, is set to be moved.
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