In a letter to Boris Johnson, she said that she was stepping down from the government role to spend “precious time” with her family.
Ms Tolhurst, who represents Rochester and Strood, said she hoped to have the opportunity to serve again in government “in the fullness of time”.
She wrote: “Following on from some devastating news for my family, after much consideration and deep reflection, it is with the great sadness that I am writing to notify you of my intention to step down from my role as the Parliamentary Under Secretary of State in the Ministry of Housing, Communities, and Local Government, so that I am able to care for, and spend some precious time with my family in the coming months.
“It has been an immense privilege to serve in your Government under three different departments – in my current role as Rough Sleeping & Housing Minister, and previously as the Small Business Minister in the Department for Business, Energy, and Industrial Strategy, and as Maritime, Aviation, and Security Minister in the Department for Transport.”
Downing Street said that assistant whip Eddie Hughes has been appointed as her replacement.
Mr Johnson said in reply to Ms Tolhurst that he was “very sorry” to receive her resignation, and thanked her for her contribution to government.
He later tweeted to say his thoughts were with Ms Tolhurst and her loved ones at this “difficult time”.
The prime minister wrote: “Kelly, very sad that you’re standing down from government. You’ve been a brilliant minister at three departments but family must come first.
“My thoughts are with you and your loved ones at this difficult time.”