WAtoday can reveal he wrote an apology letter to the woman after an official complaint was made about his conduct at the 2017 party.
The annual event,which was held at West Leederville's Nowhereman Brewing Co in 2017,is a Minister-funded swim through at which government ministers and their staff network with journalists,reporters and media executives.
"On 14 December 2017 we both attended an end of year Christmas function,"Mr Kaless wrote.
"I was subsequently informed that my actions on the night caused you discomfort and distress.
"I greatly regret causing you any distress,as it was not my intention,and I ask you to accept my unreserved apology."
Mr McGowan said the 2017 incident was dealt with appropriately.
Mr Wyatt said the latest incident was"tragic for everybody",including Mr Kaless.
WA Treasurer Ben Wyatt speaks to reporters on Stephen Kaless' resignation.Credit:Marta Pascual Juanola
"These things at every turn,are tragic,"he said.
"Ultimately,we're all human beings and they're awful for everybody.
"These things are very difficult,but ultimately the behaviour meant that his position was untenable and Mr Kaless obviously worked that out pretty quickly and resigned his position."
Before taking up an appointment to Mr Wyatt's office,Mr Kaless was the chief of staff of Seven News Perth for four years.
His resignation comes in the week Mr Wyatt was expected to bring down the mid-year budget review.
Mr McGowan's office declined to answer questions about the 2017 incident or specific questions about the incident at Mr Wyatt's Christmas function on Friday night.
'The government has a problem with women'
Opposition integrity spokesman Tjorn Sibma criticised the handling of complaints against Mr Kaless and accused the McGowan Government of"having a problem with women".
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"I think it's shocking that allegations have been made about Mr Kaless's behaviour,which go back a good two years,potentially more,and nothing seems to have happened over that time,"Mr Sibma said.
"I think it reflects very poorly on the leadership of Ben Wyatt and Mark McGowan and their treatment of women."
He said the government did not deal with the 2017 complaint appropriately.
"Quite frankly,Labor members have been very vocal about important social issues regarding domestic violence and the treatment of women.
"What we see is that they say one thing in public and they behave in private quite differently.
"I think it's very shocking,this government has a problem with women and it's not the only occasion.
"You don't protect office creeps going about predating on women. It's completely unacceptable."