Labour MP Keith Vaz will resign his position as chair of the Home Affairs Select Committee, after claims he paid for sex were made in a Sunday newspaper.
Vaz reportedly met two Eastern European men for sex at his London flat eight days ago and offered to pay for cocaine, although he said he did not want any himself.
The Home Affairs Select Committee, which is charged with examining the policy and administration of the Home Office, is currently overseeing a review of the UK's prostitution laws.
It published a report in July saying it was not convinced that paying for sex should be outlawed, but that soliciting by sex workers should be decriminalised.
"I am genuinely sorry for the hurt and distress that has been caused by my actions, in particular to my wife and children," Mr Vaz said in a statement.
"I will be informing the Committee on Tuesday of my intention to stand aside from chairing the sessions of the Committee with immediate effect."
Mr Vaz has been MP for Leicester East since 1987. He is married and has two children with his wife, Maria.
The Sunday Mirror alleged the MP had two meetings with the escorts, including a 90-minute meeting on August 27.
One text, reportedly sent by Mr Vaz, said the men should arrive at "11pm, nice and late". He is said to have added: "I want a good time please."
Mr Vaz is alleged to have asked the young men to bring poppers (amyl nitrate) to the flat, as well as allegedly joking about being a "pimp".
In an effort to conceal his identity, Mr Vaz told the sex workers that his name was "Jim" and that his job was selling "industrial washing machines."
The Sunday Mirror reports that is has seen statements showing two cash deposits of £150 paid into an account following a string of text messages between Mr Vaz and one of the escorts discussing details of their meetings - including financial arrangements.
The money was paid in by a man connected to a diabetes charity called Silver Star, which was set up by Mr Vaz when he developed the condition six years ago.
There is no suggestion that the man knew the purpose of the payments, the Sunday Mirror reported.
"It is deeply disturbing that a national newspaper should have paid individuals to have acted in this way," Mr Vaz told the BBC.
"I have referred these allegations to my solicitor Mark Stephens of Howard Kennedy who will consider them carefully and advise me accordingly."