Mike Hancock, 67, met with Deputy Prime Minister Nick Clegg, the party leader, The Guardian reported. A spokesman said Hancock would withdraw from the party pending the outcome of a civil case brought by a woman described as vulnerable.
"Mike Hancock strenuously denies the allegations made in the civil case and intends to clear his name in court," the spokesman said.
Hancock, who has represented Portsmouth South since 1997 after briefly holding the seat following an earlier by-election, will remain in Parliament as an independent.
In 2010, police arrested Hancock on suspicion of raping the constituent, but he was never formally charged. He had another brush with scandal when Ekaterina "Katia" Zatuliveter, a Russian national who was working for him as a parliamentary aide, was accused of being a spy. Zatuliveter, who said she had had an affair with Hancock, successfully fought deportation.
Harriet Wistrich, who represents Hancock's constituent, said she first notified party leaders of the woman's allegations in 2011 and received no response.
"She is relieved that her perseverance has finally had some impact," Wistrich said. "The abuse of Mike Hancock's power and status as an MP is a matter that should concern all politicians with an interest in challenging the sleaze that taints the reputation of Parliament."
The woman apparently first approached Hancock in 2009 because she was having trouble with noisy neighbors.