Kaila Murnain has resigned as NSW Labor general secretary, saying she's sorry she let the party down.
Ms Murnain was suspended from her role in August after admitting to the Independent Commission Against Corruption she failed to act on information Chinese billionaire Huang Xiangmo had donated to the party.
"I have dedicated my entire life to Labor. I am devastated to leave. I'm sorry to have let you down," Ms Murnain said in a statement posted on Twitter on Thursday.
"This has been an incredibly difficult time for me and my family, so for now, I ask for privacy."
Party president Mark Lennon said the terms of the separation agreement were confidential, but "consist of Ms Murnain's basic legal entitlements".
It's been reported she could have received a severance package worth up to $700,000.
A new branch secretary will not be elected until a review into the state party's head office has provided its recommendations on the general secretary's role.
Ms Murnain claimed former upper house MP Ernest Wong told her in September 2016 about Mr Huang's alleged illegal donation but she was encouraged by party lawyers to keep quiet.
Mr Huang is accused of being the true source of $100,000 in cash donations from 12 people to a 2015 Chinese Friends of Labor dinner.
Ms Murnain welcomed the party review, which was announced by federal and NSW leaders, Anthony Albanese and Jodi McKay respectively, at the weekend.
She hoped for "further real and lasting reform to the Labor Party".
"I am proud of many of the party's accomplishments during my time as general secretary and thank those who worked together in some very difficult circumstances over the past three years."
Ms McKay on Thursday reiterated that Ms Murnain "made a terrible error of judgement".
"She has no further future in the Labor Party," the NSW opposition leader said in a statement.
"I am outraged on behalf of our thousands of loyal, decent party members that it has been such a drawn-out process."
Ms McKay said her focus now was on "cleaning up head office".
Mr Lennon said NSW Labor was considering seeking the recovery of its costs related to the ICAC inquiry, including the amount to be paid to Ms Murnain, under its insurance and from previous lawyers.
Australian Associated Press