A statement from Mr Turnbull's office said the Prime Minister thanks Mr Joyce for his service, and that the Coalition remains "Australia's most successful political partnership".
Barnaby Joyce will step down as Deputy Prime Minister on Monday. Turnbull stopped short of asking Joyce to resign, but it was still a pretty embarrassing public chiding.
"To give these people in the weatherboard and iron, in those regional and small towns the best opportunity, this current cacophony of issues has to be put aside", Mr Joyce said.
He then opened up about the recent sexual harassment allegations revealed in some media, saying he had referred at least one of these to the police.
"I will say on Monday morning at the party room I will step down as the leader of the National Party and deputy leader of Australia", Joyce said.
Little-known outside Australia, Joyce made worldwide headlines in 2015 when he deported two dogs brought into Australia by US actor Johnny Depp without the proper paperwork, a row that became known as the "war on terrier".
Australia's deputy prime minister to quit on Monday
Joyce's resignation will potentially heal the rift between the Liberal and National parties, a political alliance that has existed for almost 100 years.
Friday's news conference came less than 24 hours after the second of those women came forward with allegations that Mr. Joyce had harassed her. "I don't believe any of them have been sustained", he said.
"Barnaby Joyce has denied the allegation, but it's being investigated", he said.
Joyce had spent the past week on "holiday" in Armidale, though he made a number of media appearances, including a candid interview with his partner and former media advisor, Vikki Campion.
Two-thirds of voters want Mr Joyce to resign over the affair, according to the Australian newspaper's Newspoll.
The saga prompted Prime Minister Malcolm Turnbull to introduce a ban on sexual relationship between government ministers and their staff, a move that Joyce described as "inept". But it has also highlighted the perilous state of the coalition government, which just a few months ago survived a crisis over lawmakers' dual citizenship that threatened its wafer-thin parliamentary majority.