Treasury boss John Fraser has announced he will resign, with a former chief-of-staff to Liberal treasurers Peter Costello and Scott Morrison set to replace him.
Prime Minister Malcolm Turnbull said the treasury secretary would officially leave the job at the end of the month, paving the way for Philip Gaetjens to take over.
"In the last three and a half years in the role as treasury secretary Mr Fraser has led Treasury to new heights, especially in the areas of corporate and personal income tax reform," Mr Turnbull said in a statement on Thursday.
Mr Fraser, whose term was due to run out in 2020, hinted at a possible move in a speech on Wednesday, saying it was not expected that when people joined Treasury they would stay for their whole career.
"Some will make a valuable contribution over three to five years before moving on to different things," he said.
Mr Fraser's final day will be July 31.
Mr Gaetjens was secretary of the NSW Treasury between 2011 and 2015.
He has served as a senior executive in the Commonwealth Treasury, the Department of the Prime Minister and Cabinet and the South Australian Department of Treasury and Finance.
He also previously served overseas as the inaugural director of the Asia-Pacific Economic Cooperation (APEC) policy support unit in Singapore.
As chief of staff to two federal treasurers he was directly involved in the preparation of 11 budgets.
"I look forward to working with him again in his new role," Mr Morrison said.
Mr Gaetjens was due to to become Australia's ambassador to the Paris-based Organisation for Economic Development and Cooperation, but the government will now have to find a replacement.
Shadow treasurer Chris Bowen wished Mr Fraser the best but was critical of his replacement.
"The appointment is unlikely to restore faith in the Australian Treasury after years of politicisation by the Liberal Party and by Scott Morrison in particular," Mr Bowen said.
Despite the appointment coming close to a federal election, the opposition was not consulted.