Ms Lambrecht bowed to growing pressure which she said had become a distraction as she asked Chancellor Olaf Scholz to relieve her of her duties.
“The valuable work of our soldiers and many motivated people in the field has to be the priority,” she said.
Mr Scholz will now be looking for a successor to repair the image of the German military and convince allies that Berlin can modernise its army and has the stomach to stand up for Ukraine.
A key meeting of defence ministers is expected on Friday at a US airbase in Germany, where new support for Ukraine could be announced.
All eyes are on whether Germany will allow Leopard battle tanks to go to Ukraine, a move being urgently demanded by Kyiv and some Nato allies.
“There is war in Europe, therefore Germany needs a new defence minister quickly,” said one MP from Mr Scholz's coalition, Michael Kruse.
A lack of military experience was seen as a drawback by critics of Ms Lambrecht, a lawyer by training, who was dubbed the “minister of mishaps” by German media and accused of a stuttering response to the war.
Ukraine made no secret of its frustration with Germany for holding back potential weapons such as the Leopards.
Ms Lambrecht was separately accused of breaching Nato confidentiality by telling the media she had offered Patriot missiles to Poland before a deal had been finalised.
It came as problems with the Puma tanks allocated to a Nato rapid-response unit forced Germany to replace them at the last moment, making a mockery of its talk of modernisation.
Ms Lambrecht then put her foot in it again by filming a bizarre New Year’s Eve video in which, barely audible over the sound of fireworks, she credited the war with introducing her to some “great people”.
Pressure mounted after what was seen as a tone-deaf message, with one recent poll showing 70 per cent of Germans unhappy with Ms Lambrecht’s performance.
In her resignation statement, Ms Lambrecht blamed a "months-long media focus on me personally" for taking the focus away from soldiers, the army and security policy.
Allies of Ms Lambrecht said she had a tough inheritance after previous governments failed to invest in the military.
Vice Chancellor Robert Habeck said Ms Lambrecht had "taken responsibility in difficult times" and said her resignation "shows how seriously she takes the job".
But critics saw her departure as overdue and are demanding that Mr Scholz pick a more hardline replacement.
Coalition horse-trading in Berlin means her successor is likely to be from the Social Democrats (SPD), like Ms Lambrecht and Mr Scholz — not necessarily the natural home for tough-on-Russia defence hawks.
One name mentioned in the media is Eva Hoegl, who holds a role in Germany's parliament scrutinising the armed forces.
Ms Hoegl is well aware of the army's equipment problems after reporting on them to MPs, and recently suggested a €100 billion fund to upgrade the military might have to be trebled.
"Affinity with the troops, readiness for action and a certain experience should play the decisive role in the appointment. Eva Hoegl would, for example, be suitable," said one opposition MP, Florian Hahn.
Another possibility is Siemtje Moeller, already a junior minister in the department.
Lars Klingbeil, a senior SPD figure who comes from a military family, has also been mentioned — although his appointment would violate Mr Scholz's promise to have a gender-balanced cabinet, unless he embarks on a wider reshuffle.
One proposed way around that would be to appoint an incumbent such as Labour Minister Hubertus Heil or chief of staff Wolfgang Schmidt to the defence post, and promote a woman to replace them.