Rifi's decision comes two days after Saudi Arabia announced it was suspending $3 billion in aid to Lebanon's army in protest over "hostile" positions it said were inspired by Hezbollah.
"There is an armed part that is dominating the government's decision," Rifi said in a statement, referring to Hezbollah.
"Hezbollah has used this government to consolidate its project of a mini-state. It wanted to use it as a tool to extend its control over the state and its decisions," he added.
"I will not accept becoming false witness and covering for those trying to dominate the state and its institutions... that is why I am presenting my resignation."
Rifi accused Hezbollah of being responsible for the political crisis in Lebanon that has left the country without a president for the last 21 months.
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And he said the Iranian-backed party was "destroying Lebanon's relations with the kingdom of Saudi Arabia."
Lebanon's political scene is deeply divided, with the government split roughly between a bloc led by Hezbollah and another headed by former prime minister Saad Hariri, to which Rifi belongs.
Hezbollah is a close ally of the Syrian regime, and is backed by Tehran, while Hariri's bloc is close to Iran's regional rival Saudi Arabia, and is supported by Western powers including Washington.
The schism has been exacerbated by the war in neighbouring Syria, with Hezbollah sending fighters to bolster President Bashar al-Assad against an uprising that is supported by Saudi Arabia and Hariri's political bloc.
Rifi's resignation statement also cited alleged Hezbollah interference in the case of Lebanon's former information minister Michel Samaha, who is facing charges of having planned "terrorist" acts.
Rifi accused Hezbollah of blocking his efforts to transfer the case against Samaha, a former close confidante of Damascus, to Lebanon's highest court.
Samaha is currently free on bail as he faces retrial on charges of plotting attcks with Syrian security services chief Ali Mamluk.