Derek Handley says an offer of chief technology officer position has been retracted by the Government and he has received a three-month pay out.
In a statement, Mr Handley wrote he had accepted the role a month ago but was informed this week "the Government will no longer follow through with their commitment and will not be making that appointment at this time".
"Given the unnecessary and sustained lack of transparency around the process and building pressure to rethink the approach, their decision to stop the process is understandable," he said.
The chief technology officer was intended to "drive a forward-looking digital agenda for New Zealand", said former Minister for Government Digital Services Clare Curran, when the role was announced last December.
Mr Handley had returned to live in Auckland last weekend for the role, after living in New York for 10 years.
"As the Government has now terminated my contract I have been offered a settlement payment as per the contract," he said. "The amount equates to three months pay plus reimbursement of my costs.
"My family and I have decided not to accept the settlement money personally and instead donate the net proceeds towards a fund that supports ideas, programmes and grants that seek to tackle this societal issue in creative ways. I welcome collaboration from all communities on how we may do that."
The new Minister for Government Digital Services Megan Woods said the Government have put a “full stop” on the process of CTO.
She confirmed Mr Handley would be paid $107,500.
“As the new Minister I have asked officials to review the CTO role and provide advice on the best ways to drive a forward-looking digital agenda for New Zealand,” she said.
It comes after MP Clare Curran was stripped of her position as Minister for Government Digital Services after not disclosing a meeting with Mr Handley previously.