Youth PS Lillian Omollo and Director-General Richard Ndubai have stepped aside to allow investigations into the alleged Sh9billion scam.
They are the two officers directly responsible for the functions of the service in the period being investigated.
"President Uhuru Kenyatta accepted the offer by the two officers to step aside for a period of three months to allow investigating agencies to complete their work," State House spokesperson Manoah Esipisu said.
In a statement to newsrooms on Friday, Esipisu said Uhuru expects any public official directly implicated in the investigations to uphold the code of integrity and ethics to which they are committed and to act accordingly.
"The President has every confidence in the work of the investigative agencies, and in the event, any wrongdoing is established, he has directed that swift prosecution should follow," he said.
On Monday, Lillian refuted claims that the money had been lost in a new scandal.
She disputed a report by the director general of the National Intelligence Service that 13 vouchers amounting to Sh8b were paid to "ghost" companies for non-existent supplies to the NYS.
"The vouchers given to the DCI for investigation are for Sh900 million. This is not remotely close to the amount claimed to have been stolen or lost," she wrote in a memo to Public Service Cabinet Secretary Margaret Kobia on May 12.