Rod Marsh, who was due to step down in 2017, resigned on Wednesday after two and a half years in the role.
It comes as the pressure grows on Australia, who were embarrassed in a loss to South Africa by an innings and 80 runs in Hobart.
The result left Australia 2-0 down in the three-Test series and Marsh said it was time for him to move on.
“This is my own decision and no one within Cricket Australia has pressured me or even suggested that I should do this,” he said.
“Clearly, though, it is time for some fresh thinking, just as it is for our Test team to welcome some new faces as we build for the future.
“I have always had the best interests of Australian cricket foremost in my heart, and that’s why I have made this decision.
“I have thoroughly enjoyed the role and want to thank the coach, the staff, my co-selectors and all the players for their support and honesty over the past two and a half years. It was a thrill for me to be involved in many successes, including the World Cup win in 2015.
“I wish the captain, coach and the team all the best going forward. We will be great again.”
Cricket Australia’s board will hold an extraordinary meeting on Wednesday, expecting to make an interim appointment.