Esther McVey has become the second Cabinet minister to quit Theresa May's cabinet.
The Work and Pensions Secretary said the Brexit deal "does not honour the result of the referendum" as she confirmed she had handed in her resignation this morning.
In her letter of resignation, Ms McVey said that the proposed deal meant "handing control to the EU" and said it "threatens the integrity of the United Kindom".
She added: "We have gomne from no deal is better than a bad deal, to any deal is better than no deal ... I cannot defend this and I cannot vote for this deal."
Earlier this morning I informed the Prime Minister I was resigning from her Cabinet pic.twitter.com/ZeBkL5n2xH
— Esther McVey (@EstherMcVey1) November 15, 2018
Mrs May paid tribute to the pair as she faced MPs in the House of Commons to deliver a statement on her plans.
"Delivering Brexit involves difficult choices for all of us," said the Prime Minister. "We do not agree on all those choices, but I respect their views."
The shock departures of Mr Raab and Ms McVey came within little more than an hour of one another, amid a furious backlash from Brexit-backing Tories to the deal given the collective approval of Mrs May's Cabinet in a stormy five-hour meeting at 10 Downing Street on Wednesday.
Read more: Esther McVey's resignation letter in full
Their resignations were followed by a second Brexit minister, Suella Braverman, while Anne-Marie Trevelyan announced she was quitting as an unpaid parliamentary aide in the Department for Education.
Earlier, Shailesh Vara quit as minister of state for Northern Ireland, saying Mrs May's agreement, "leaves the UK in a halfway house with no time limit on when we will finally be a sovereign nation".
The developments threaten to derail the Prime Minister's Brexit strategy ahead of a crucial EU summit on November 25, with just over four months to go until the UK is due to leave on March 29.
Labour said the Government was "falling apart before our eyes" and the pound dropped sharply after Mr Raab's resignation.
In his letter to the Prime Minister, Mr Raab said the deal represented a "very real threat to the integrity of the United Kingdom" because of provisions for Northern Ireland.
He also said he could not accept "an indefinite backstop arrangement" for the Irish border.
He said: "No democratic nation has ever signed up to be bound by such an extensive regime, imposed externally without any democratic control over the laws to be applied, nor the ability to decide to exit the arrangement."
Ms McVey, who was promoted to the Cabinet by Mrs May in January, was reported to have been close to tears as she tried to force a vote on the Brexit deal in Wednesday's Cabinet.
In a letter to the PM, the Tatton MP cited concerns over the future of the Union and a lack of control over money, law, borders and trade policy under a deal she felt kept the UK too close to Brussels.
"The British people have always been ahead of politicians on this issue, and it will be no good trying to pretend to them that this deal honours the result of the referendum when it is obvious to everyone that it doesn't," wrote Ms McVey.
"We have gone from no deal is better than a bad deal, to any deal is better than no deal.
"I cannot defend this, and I cannot vote for this deal. I could not look my constituents in the eye were I to do that."
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