Per Sandberg, 58, admitted he had gone with Bahareh Letnes, 28, without informing the prime minister and had taken a government phone to Iran.
The PM governs in coalition with his anti-immigration Progress Party.
The trip risked exposing Mr Sandberg to Iranian spies, as he should not have taken a work phone with him.
Ms Letnes is a former beauty queen who now manages a fish export business. She has Norwegian residency and has denied any links to Iran's Islamist government. Norwegian intelligence is reported to be investigating her activities now.
Prime Minister Erna Solberg said she had ordered Mr Sandberg to hand his phone to police for safety checks. He has also resigned as deputy leader of the Progress Party.
"Per himself asked to step down, and I think it was the right decision," Ms Solberg, a Conservative, told reporters.
"He didn't show the necessary common sense when it comes to handling security issues," AFP news agency quoted her as saying.
Seafood is Norway's second-largest export industry after oil and gas. (AFP)
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