Family First senator Bob Day has tendered his resignation, effective immediately.

Key points: Day earlier signalled his intention to resign, but pulled back on that announcement

Day earlier signalled his intention to resign, but pulled back on that announcement Pressure has been mounting on him to resign after his company went into liquidation

Pressure has been mounting on him to resign after his company went into liquidation Day says he will now work with those affected by the closure of his company

His resignation deprives the Government of a certain vote on its Australian Building and Construction Commission (ABCC) legislation.

Pressure had been mounting on the now-former senator to resign as his construction company crumbled.

As Home Australia went into liquidation, Mr Day signalled his intention to resign, but later appeared to pull back on that announcement as an investor circled his failed business.

In a statement issued today, he said that potential investors would not be financing his company.

"While a number of offers for various parts of the Home Australia business have been received, the major investor who has been examining the group's portfolio of assets over the past fortnight, has decided not to proceed," he said.

"Accordingly, I have today tendered my resignation to the president of the Senate effective immediately. It has been an honour and a privilege to serve as a senator for South Australia and I am sorry it has ended this way."

South Australia's parliament will now have to convene a joint sitting to appoint a replacement, a process which requires seven days' notice.

SA Parliament will not sit again until November 15, which would allow Mr Day's replacement to attend the final two sitting weeks of Federal Parliament.

A spokesman for SA Premier Jay Weatherill said: "The Government will not delay this process and will seek to arrange a joint sitting at the earliest available time."

Deputy Prime Minister Barnaby Joyce said he hoped Mr Day's replacement would "arrive in Canberra for work as quickly as possible", adding it was unlikely votes would be delayed.

"I want to make sure that we proceed with these votes, all votes, as quickly as possible," he said.

"We'll do it on the basis that we hope that the Family First senator will be replaced as quickly as possible. There's no reason to delay [votes] at this stage."

Mr Day said he would now work to assist those affected by the closure of the company, which saw construction on more than 200 homes cease.

The former senator is a shareholder in Home Australia and has made personal guarantees to some of the creditors. It is not known whether he has the assets to cover those debts.

Labor and the Greens had previously criticised him for keeping his options open, arguing the former senator's vote would be tainted and that he should be devoting his efforts to helping the families hurt by his business collapse.

The Coalition maintained that it was up to Mr Day to decide when he was going to leave the Senate and while he was in parliament his vote would count.

Labor raises suspicions about training grant

Today's announcement coincides with Labor comments over a Federal Government grant to a training college chaired by Mr Day.

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The Government has rejected suggestions a $1.8 million grant was part of a deal to garner the former senator's vote to support the ABCC bill.

Talking ahead of Mr Day's resignation, Labor senator Doug Cameron said the situation looked suspicious.

"Bob Day goes and has a private meeting with Simon Birmingham, a few weeks later an advisory group is set up to try and deliver what he has asked," Senator Cameron said.

Education and Training Minister Simon Birmingham dismissed the connection Senator Cameron was trying to make.

"We have been trying to tackle the drop off in apprenticeship numbers that Labor created when they were in government and it's clear that Doug Cameron is trying to throw mud to cover up his party's failures," Senator Birmingham said.

"As I said at Senate Estimates, I met with various groups on their suggestions for fixing the damage Labor did to apprenticeships and suggested they present their ideas to the Apprenticeship Reform Advisory Group.

"Labor should know better than to attack a 10-year-old not-for-profit, community-run vocational college that has helped hundreds of apprentices just because Bob Day donated his time to them."

It also follows reports that Mr Day effectively gave $1.47 million to his political party a year after taking a sizable dividend from his loss-making home-building empire.

In an update to its 2013-14 donation disclosures, filed with the Electoral Commission and published last month, Family First has confirmed the former senator forgave a loan to the party totalling $1,471,000.

The records show he also made separate donations of $484,000 to the party in 2013-14 and $73, 200 in 2014-15, putting his total donations to the party in excess of $2 million.

The donations coincided with losses in his construction company - financial reports show it recorded losses of $1.2 million in 2013 and $3 million in 2014.

ABCC, Senate voting legislation dominated Day's term

Mr Day was first elected to the Senate in 2013, and become one of eight crossbenchers the coalition government battled with to pass legislation through the Upper House.

The government turned to him as something of a negotiator with other crossbenchers, as they tried to garner enough support for the ABCC legislation.

That move failed, and the nation went to an early double-dissolution election.

He launched an unsuccessful High Court challenge to the Coalition's changes to Senate voting legislation.

Months later, he snuck back into the parliament claiming the final Senate seat in a tight battle influenced strongly by the emergence of the Nick Xenophon Team.