Haziq Abdullah Abdul Aziz has been suspended as senior private secretary to Primary Industries Deputy Minister Shamsul Iskandar Md Akin with immediate effect.
Shamsul Iskandar said a show cause letter has also been issued on June 12, which Haziq must reply within three days.
"The ministry will not hesitate to end his contract immediately if there is no response within the stipulated period," he said.
This followed Haziq's confession to being one of two men in gay sex videos being circulated this week. He claimed the other individual was Economic Affairs Minister Azmin Ali.
Azmin has denied that it was him in the sex clips and described them as a plot to ruin his political career.
Shamsul explained that Haziq was hired based on the assessment made during his interview, his academic qualifications and work experience all which suited the job scope.
"As such, his actions are shocking and very unexpected," he said.
Previously, PKR vice-president Zuraida Kamaruddin claimed that Haziq's background was dubious and he was known to be close to the opposition.
Shamsul said Haziq's contract had stipulations regarding conduct that could tarnish the government's image.
Pressed on whether the action was due to Haziq's confession, his sexual orientation or because he implicated a minister, Shamsul Iskandar said all matters must be taken into consideration.
"(We cannot) separate one from the other. When he came out and admitted that was him, we had to instruct him to reply because there are several clauses related to upholding the image and reputation of the government," he said.
Elaborating further, he said Haziq's confession alone had tarnished the reputation of the government and this itself warranted his suspension.
He added that Haziq has not been at work since Tuesday and is considered to be absent without official leave.