The resignation came on the eve of an unsourced report in The Australian newspaper that Brown danced in "very brief" underpants to techno music on a leather couch during a drunken late night party in his Parliament House office three months ago. He was then housing minister.
Rees said he demanded Brown's resignation Wednesday night because the former lawyer and university lecturer - a state lawmaker for nine years - initially gave assurances that "absolutely nothing untoward" had happened during the party.
"I subsequently put it to former minister Brown late last night that there are too many reports of you in your underwear for me to ignore," Rees told Fairfax Radio Network. "He conceded he'd been in his underwear and that gave me no option but to demand his resignation."
Telephone calls to Brown's office went unanswered Thursday.
The scandal is a blow to Rees' efforts to revive the flagging fortunes of the 13-year-old Labor Party government with a new leadership team. "Embarrassed doesn't begin to describe it," Rees said.