Queenstown Lakes District Council chief executive Adam Feeley has resigned.
In a report released last month, the Auditor-General criticised the council for the way it handled a potential conflict of interest resulting from Mr Feeley's involvement in a private property development scheme near Arrowtown.
The Auditor-General said no inappropriate influence was exercised by Mr Feeley himself but his contract with the council should have prevented him from such involvement, so as to avoid any perception of a conflict of interest.
Council staff have today been told Mr Feeley, who is a former head of the Serious Fraud Office, is leaving the council to pursue other opportunities.
Queenstown mayor Vanessa van Uden said in a statement released by Mr Feeley's office that he had left the council in better financial shape than when he started in 2012.
"We wish Adam well and thank him for what he has achieved in his three years with us," she said.
"I will be discussing Adam's resignation with councillors at the earliest opportunity and expect that we will begin recruitment swiftly."
Councillor Ella Lawton told RNZ it would be a mistake to link Mr Feeley's resignation with the controversy surrounding the special housing area near Arrowtown.
"Special housing areas was a very unique situation. It was new and it was part of a learning process," she said. "I think we had actually dealt with that quite well."
She said Mr Feeley made a valuable contribution in helping to upgrade the council's IT systems.
Mr Feeley's office said in the statement he would finish work at the council in late February.