Senator McKenzie tendered her resignation as agriculture minister on Sunday, following intense backlash over funding decisions made in her previous role as sports minister.

Prime Minister Scott Morrison made the announcement during a press conference in Canberra.

Senator McKenzie has also resigned from her position as deputy National Party leader.

Mr McCormack, who is The Nationals' leader, confirmed he would step in as interim agriculture minister and said a new deputy leader would be elected on Tuesday.

"The position of deputy leader of The Nationals is a matter for The Nationals party room, which is scheduled to meet on Tuesday," he said in a statement.

"I will act as the Minister for Agriculture until a new minister is appointed."

Mr McCormack said Senator McKenzie would remain as The Nationals' Senator for Victoria and "will continue her strong representation for that state, in particular her work on behalf of the residents of regional Victoria".

"Senator McKenzie's energy and enthusiasm in any of her roles are evident to all who meet her and I know she will continue in her efforts to serve the people of Victoria and Australia," he said.

Mr Morrison last month ordered an investigation into the handling of the federal government's $100 million sports grant program; in particular a $36,000 grant Senator McKenzie awarded to a Victorian shooting club of which she is a member.

A departmental report received by the PM said Senator McKenzie had breached ministerial rules.

Last week, it was revealed a Wagga club was denied hundreds of thousands of dollars under the controversial sports grant scheme.

South Wagga Apex Club's $385,448 request to build a new bike track at Lake Albert was knocked back despite scoring highly in the assessment process.

It was revealed the club's application scored 85 out of 100 under the Sport Australia's merit-based process.

A score of 74 out of 100 was the cut-off for funding.

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