AWI chairman, Wal Merriman, has accepted her resignation.

Mr Merriman said that while he was disappointed Ms McGahan was not staying on in the role, he understood her rationale for leaving.

"I know of no better advocate for the wool industry in Australia than Brenda McGahan," Mr Merriman said.

"I know I will be just one of many woolgrowers who will be disappointed at Brenda’s decision.

"She created a great sense of excitement and hope for the future of the wool industry in what has been a very tough environment over the past couple of years."

Mr Merriman said Ms McGahan's decision was brought about by her frustration at the ongoing differences of opinion amongst members of the board, particularly since the annual general meeting.

"Brenda has achieved a great deal in her time with the business including the successful outcome of the 2009 Wool poll, the partnership approach to integrated marketing with both trade and consumer, and reduction in overall costs of $25 million as well as generating a general sense of unity amongst growers across Australia," Mr Merriman said.

"There is no doubt she will be leaving the organisation in much better shape than it was when she arrived."

Ms McGahan will stay on as CEO until a replacement has been appointed.