The Prime Minister says an investigation found senator Bridget McKenzie failed to disclose her membership of a gun club which received sports grants.

Former Sports Minister Bridget McKenzie has resigned over the much-maligned sports rorts scandal.

In a press conference this afternoon, Prime Minister Scott Morrison confirmed Ms McKenzie had handed her resignation in following weeks of mounting pressure over the scandal.

The fate of the Nationals Deputy Leader had hung in the balance after reports suggested she had broken ministerial rules in her handling of the $100 million sports grant program.

Mr Morrison ordered his department secretary to look into the handling of the multi-million dollar program, and particularly a $36,000 grant Ms McKenzie when she was sports minister awarded to a Victorian shooting club of which she is a member.

The report, handed to the PM today, found Ms McKenzie had not breached ministerial standards in her awarding of the sports grants.

The report found the grants had not been awarded where “political considerations were the primary determining factor” and she had instead shown the “discretion she was afforded accordingly”.

The report did however find Ms McKenzie’s gun club membership was a breach of ministerial standards.

“On the basis of that, and it is a conflict of interest in the failure to disclose, the minister has tendered her resignation to me this afternoon,” Mr Morrison said.

“I want to thank Bridget McKenzie for the outstanding job she has done in serving both in my cabinet and my predecessor’s cabinet.

“I particularly want to thank Bridget for the amazing work she has done in regional Australia, and the incredible application she has shown and dedication to Australians in rural and regional areas who have been doing it tough through drought. She has been a drought champion for these farming and rural communities around the country.

“This is Federal Cabinet, there are standards that must be upheld and she understands that and so do I.

“But I don’t think that that in any way takes away from the outstanding work that she has done as a minister both in my government and my predecessor’s government.”

In a statement this afternoon, Ms McKenzie said it had been a “very difficult period” for her and her staff and thanked them.

Ms McKenzie said she was determined to stay a senator for the Victorian National Party and to “keep fighting for the needs of rural and regional Australians”.

The sports rorts scandal came to light after a damning report by the Audit Office over how the sports grants were doled out in the run up to the federal election.

Earlier, Labor leader Anthony Albanese said a report by Mr Gaetjens, Mr Morrison’s former chief of staff, isn’t needed to know that there’s something wrong with someone giving funds to an organisation that they are a member of without declaring that.

“The Audit Office report is damning. Bridget McKenzie must go, and she must go today so that this government can actually start to act like a government,” Mr Albanese told reporters in Melbourne.

The former sports minister and agriculture minister had her backers.

“I know Bridget McKenzie as a good minister,” Home Affairs Minister Peter Dutton told Sky News.

“She is someone with a lot of passion in her current portfolio, but certainly when she was sports minister as well.” He said she didn’t make recommendations for funding to go to clubs against advice.

“There might have been a different priority order, as I understand it.”