Her resignation as veterans affairs minister comes as a controversy engulfs the government from her time as attorney general and allegations that Trudeau's office pressured her not to prosecute Montreal firm SNC-Lavalin on corruption charges.
Prime Minister Justin Trudeau's office says Wilson-Raybould told the prime minister Monday night of her intention to resign from cabinet.
"I will highlight however that there's a real danger, and it's been flagged for me, of unintended consequences, particularly because there are two court cases ongoing directly related to this matter that could be impacted by such a decision we might make".
WATCH BELOW: What's next for Jody Wilson-Raybould after her resignation?
Jody Wilson-Raybould, who was Canada's first indigenous attorney general and justice minister prior to being shuffled to another post last month, announced on Twitter that "with a heavy heart" she was leaving the cabinet.
Trudeau denies the allegations, claiming "Neither the current nor the previous attorney general was ever directed by me or anyone in my office to take a decision in this matter".
In response, Trudeau said he was "surprised and disappointed" by her departure, but didn't hold back in criticizing her decision to leave the cabinet table saying it was "not consistent" with their recent conversations.
The scandal is now being looked at by Federal Ethics Commissioner, Mario Dion.
SNC-Lavalin is facing allegations that former executives paid bribes to win contracts in Libya under Muammar Gaddafi's regime, which fell in 2011.
According to the Globe, the federal director of public prosecutions refused to enter negotiations about a remediation agreement with SNC-Lavalin in October.
Wilson-Raybould shepherded legislation to allow medical assistance in dying, prohibit discrimination based on gender identity and gender expression, and to legalize cannabis.
Cardi B goes for first Grammy win; Ariana Grande, Drake among no-shows
Rappers Post Malone ("Beerbongs & Bentleys") and the absent Drake's best-seller "Scorpion" are also vying for the top prize. Kendrick Lamar , Drake , and Childish Gambino all reportedly declined to perform at the show.
Ms Wilson-Raybould has so far declined to comment on the story, citing solicitor-client privilege.
The PM says nothing illegal happened; if so, he could fix this by letting his former attorney general speak.
Prime Minister Justin Trudeau speaks with Minister of Justice Jody Wilson-Raybould during a swearing-in ceremony at Rideau Hall, Wednesday Nov.4, 2015 in Ottawa.
Opposition MPs, including Conservative Leader Andrew Scheer, have urged the Liberal-dominated committee to support the calls for a study.
The Trudeau government passed a law a year ago which allows for remediation agreements in cases of corporate corruption, wherein a company pays reparations but does not wind up with a criminal conviction that would bar it from bidding on government contracts, potentially throwing thousands of employees out of work.
"If Justin Trudeau and the Liberal government shut the justice committee's work down, it would send a unsafe signal to Canadians about the state of our democracy".
Housefather said that there has been no pressure from above to the Liberals on the committee. And that's a huge blow for Trudeau and the PMO, if indeed they were covering up the affair.
He said he's "concerned about the many unanswered questions" surrounding Wilson-Raybould's resignation and added that this is "echoed by many First Nations across the country".
Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs says Wilson-Raybould's treatment by the federal Liberals will cost them First Nation support.
She will remain a Liberal MP representing the British Columbia riding of Vancouver Granville.