Armidale Regional Council CEO Susan Law will depart at the end of the month.
Councillors, who are now suspended, had twice tried to sack Mrs Law.
During the last attempt the council took legal action against five councillors.
Mrs Law tendered her resignation on Tuesday morning, effective from July 30.
The Interim Administrator, Viv May confirmed Ms Law had chosen to resign and said her contract had not been terminated.
She will now work with the Interim Administrator on a smooth transition to installing an acting CEO for council.
"This has been a particularly difficult period for me personally," Mrs Law said.
"I will continue to be a resident of Armidale and do hope that the council can mend their differences and move forward to deliver positive outcomes for the Armidale region."