Bridget McKenzie has announced her resignation as agriculture minister over sports funding decisions she made in her previous portfolio as sport minister.

It comes after the prime minister received a departmental report that said Senator McKenzie breached ministerial rules in the so-called sports rorts scandal.

In January Prime Minister Scott Morrison ordered his department secretary to look into the handling of the $100 million sports grant program, and particularly a $36,000 grant Senator McKenzie when she was sports minister awarded to a Victorian shooting club of which she is a member.