Raab said he "cannot in good conscience support the terms proposed for our deal with the EU."
The UK's Brexit minister is among a number of politicians to resign from Prime Minister Theresa May's government following the publication of the Brexit agreement.
Dominic Raab's resignation comes after Northern Ireland Minister Shailesh Vara resigned earlier in the day.
In a tweet, Raab said he "cannot in good conscience support the terms proposed for our deal with the EU."
"I believe that the regulatory regime proposed for Northern Ireland presents a very real threat to the integrity of the United Kingdom," he wrote in his resignation letter.
"I cannot support an indefinite backstop arrangment, where the EU holds a veto over our ability to exit," he wrote.
“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 exit the arrangement.”
The pound plummeted on the news of Raab's resignation, in the biggest drop since September, Bloomberg reported.
Esther McVey also resigned as work and pensions secretary.
In her letter, she said the deal put forward "does not honour the result of the referendum".
"Indeed, it does not meet the tests you set from the outset of your premiership," she added.
Earlier in the morning, Vara posted his own resignation letter on Twitter.
Vara, who is not part of the Cabinet which met yesterday to approve the deal on behalf of the government, said in his resignation letter that he could not support the agreement because it obliges the UK to continue to follow EU rules for an undefined period.
"We will be locked in a Customs Arrangement indefinitely, bound by rules determined by the EU over which we have no say. Worse, we will not be free to leave the Customs Arrangement unilaterally if we wish to do so," he wrote.
The 'Customs Arrangement' obliges the UK to adhere to regulations around trade rules in order to avoid putting in place border controls between Northern Ireland, part of the UK, and Ireland, which remains in the EU.
The resignation highlights the challenge May will face getting the deal approved by parliament where hardliners in favour of remaining inside the EU and supporting a Brexit that leaves the UK completely free from Brussels influence have expressed opposition.
Suella Braverman, a junior minister in Britain's Brexit ministry, also resigned shortly after Raab.
"I now find myself unable to sincerely support the deal agreed yesterday by Cabinet," she said in a letter posted on Twitter.
Braverman said the proposed Northern Ireland backstop is not what the British people voted for, and threatened to break up the UK.
Anne-Marie Trevelyan, a ministerial aide in the Department for Education, also resigned.
"It has been a joy and a privilege to have served in defence and education", she wrote in a tweet alongside her letter of resignation.
"I have struggled for months to continue to give you my support on Brexit, as you battled through the most difficult public negotiations to find a new relationship with the EU after we left next year...Sadly, the deal which you and your Cabinet have approved is not one which I can support," she wrote.
"It is now clear to me that the negotiations have been built on the UK trying to appease the EU and we have allowed ourselves to be led into a deal which is unacceptable to the 17.4 million voters who asked for us to step away from the EU project and become an independent nation once again."
MP Ranil Jayawardena resigned as a parliamentary private secretary at the Ministry of Justice.
"This is a pivotal time for the United Kingdom. It is important to deliver on the democratic decision of the people. It is important to get the right deal for our country. And it is important for every Member to act in good conscience. That's why, with regret, I must offer my resignation", he wrote in a letter shared on Twitter.
**Rehman Chishti **
Rahman Chishti also said he was resigning as vice chairman of the Conservative Party because of the withdrawal agreement.
"It would not be appropriate for me to continue in these roles...as it would require me to advocate for a position which I feel is contrary to our firm manifesto commitment, which I stood for when elected in 2017, and have publicly advocated for since," he wrote in his resignation letter.