Prime Minister Malcolm Turnbull rewrote the federal ministerial code of conduct to include the ban after the affair between the Nationals leader and his former staffer Vikki Campion was revealed.
Since the scandal became public last week, Turnbull had avoided commenting for the sake of Joyces estranged wife and four daughters.
NSW Nationals Senator, John Williams, said Mr Joyce's future is a decision for the National Party.
Turnbull's comments have "caused further harm", Joyce told reporters in the Australian capital Canberra on Friday.
Joyce has been under pressure to resign, and Turnbull under pressure to force him to leave, for the last two weeks.
"So Mr Joyce and his new partner are de facto now".
He said Mr Joyce needed time off to reflect and seek forgiveness from his family and said as Nationals leader he must "consider his own position".
Mr Joyce addressed Malcolm Turnbull's criticism at a media conference this morning, and said they were "inept" and "unnecessary".
"Mr Turnbull must sack his Deputy Prime Minister from the cabinet, the time is well past the hour".
But Mr Joyce yesterday said Mr Maguire had approached him with an offer of help after the dissolution of his marriage, and knocked back an offer for payment. "I believe they were in many instances inept".
While the rule will be hard to enforce, it will give Mr Turnbull a mechanism to sack ministers who engage in behaviour like Mr Joyce's in the future.
National Party MPs, who had just chose to keep supporting Joyce, immediately warned Turnbull against trying to "blast out" Joyce, accusing the prime minister of meddling with their party's leadership.
Joyce has also come under fire over his acceptance of a rent-free apartment offered to him by his "mate", millionaire Greg Maguire, who, it later turned out, benefitted from an event organised by Joyce's department at one of his hotels at a cost of 4,000 USA dollars.
"I listened to it and thought that it was completely unnecessary - all that is going to do is basically pull the scab off for everyone to have a look at".
Joyce said he wasn't a minister late previous year when businessman and political donor Greg Maguire offered him the apartment for six months rent-free.
It has brought to new intensity the underlying tensions wracking Turnbull's fragile government and the Liberal-National Coalition itself.
But when Barnaby Joyce's sex life came up, specifically how it inspired Turnbull to ban sexual relationships between ministers and staffers, the panel didn't hold back.
Later on Thursday, Turnbull made a second surprise statement, announcing that the ministerial code would be updated to expressly forbid sexual relations between ministers and staff.
He stopped short of sacking Mr Joyce, which would have put the government's narrow one-seat majority at risk, if he were to be expelled from Parliament.
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