Senior barrister Mark Irving KC was appointed in 2024 to tackle allegations of corruption and bikie infiltration in the CFMEU but has now stepped aside, allowing a senior union official from NSW to take the reins.
Mr Irving had done a good job in very difficult circumstances, federal minister Jason Clare told reporters on Tuesday.
"He's had two heart attacks in recent times," Mr Clare said.
Mr Irving was reportedly hospitalised in May and August of 2025 after suffering chest pains.
He also received death threats after he began sacking hundreds of union officials as part of his efforts to stamp out corruption.
CFMEU NSW executive officer Michael Crosby will take over as administrator.
Mr Irving will still be involved in the union in a senior counsel role.
But the resignation of the government's handpicked corruption fighter shows the clean-up fight is failing, the opposition said.
The coalition will seek to establish a parliamentary inquiry into corruption in the construction industry, workplace relations spokeswoman Jane Hume said in a statement.
"Labor promised to clean up the CFMEU," she said.
"Instead, Australians have seen secrecy, controversy and now the resignation of the very person appointed to fix the mess."
The CFMEU's construction and general division was placed into administration in late 2024 after it was accused of corruption and links to organised crime.
Former CFMEU official and bikie Joel Leavitt, one of four men charged over an alleged extortion plot, faced court in March.
Queensland has also launched an inquiry into the CFMEU, led by commissioner Stuart Wood KC.
Australian Constructors Association chief executive Jon Davies praised Mr Irving's work and acknowledged it came with a high level of personal and professional risk.
"Given the CFMEU's history of coercive conduct and criminal infiltration in parts of the construction industry, this was not a role many would have been willing to take on," he said in a statement.
"While we have not always agreed on every issue, our engagement with Mark has consistently been respectful, direct and constructive," Mr Davies said.
The peak body for construction companies called for broad reform of the sector, warning lawlessness could re-emerge once the administration ends.
"We need stronger oversight, clearer accountability and consistent enforcement across the sector," Mr Davies said.
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