Meng Foon has resigned as New Zealand's Race Relations Commissioner on Friday, after failing to disclose a conflict of interest.
Chief Human Rights Commissioner Paul Hunt wrote to the government last month, outlining the undisclosed conflict.
Foon had been the director of a company that received government payments this term.
These included more than $2 million for accommodation, including emergency housing.
Associate justice minister Deborah Russell had been considering the matter with the preliminary view it was serious enough to remove him from the role.
But Foon resigned before a decision was reached, she said.
"Had the process been completed, it is probable I would have determined his actions represented a serious breach of the Crown Entities Act and I would have taken the next steps to recommend to the Governor-General to remove him from his office," Russell said.
"It is critical that all people appointed to public roles comply with their statutory duties. Meng Foon had multiple opportunities to adequately declare these interests and did not do so."
In a statement to Checkpoint, Foon said he refuted strongly that he did not declare his conflict of interest of being an emergency housing provider to the Human Rights Commission and the Ministry of Justice, before his appointment to the Race Relations Commissioner role in July 2019.
He said he was resigning as his company was an emergency housing provider and because of political donations he had made.
"I informed the Prime Minister that I will resign on 18/06, then let the Minister Deborah Russell know this Sunday formally with a letter to her, but the news has beaten me," he said.
Foon said the sum received was about $2.3m over five years from 2018 to 2023.
However, he said he had been transparent with the commission, with his accountant declaring the sum when asked by the Chief Commissioner, despite there being no policy to declare financial figures.
"At the housing inquiry board [Human Rights Commission inquiry into emergency housing] meeting, I didn't declare a perceived conflict as I didn't think I needed to."
He said in hindsight, he should have declared it and acknowledged he made a mistake.
In a statement, Chief Human Rights Commissioner Paul Hunt said Foon was a "man of the people" who had made an "unfortunate mistake".
"Apart from its staff and stakeholders, the Commission's greatest asset is its independence from government - its impartiality, its political-party neutrality. Meng's resignation is an important and courageous act to protect that independence," he said.
Rongomau Taketake Claire Charters praised Foon's commitment to te Tiriti o Waitangi and his work on indigenous rights.
"It is difficult to contemplate a Commissioner as dedicated to tangata whenua as Meng Foon, and he leaves a profound legacy," she said.
"Meng shone a spotlight on racism, speaking up frequently in the media for those impacted by racism.
"Meng is familiar to many of us, for standing up for those affected by the harm of racism. He modelled how to listen and build bridges between communities."