Rehab Chief Executive Angela Kerins has confirmed that she is to step down from the position.
The announcement follows controversy over the level of salaries paid in the disability support group and low profits from its charity lotteries.
Ms Kerins made her decision to retire due to the impact of the controversies on the Rehab Group and on her family.
She has received threatening letters in recent weeks, which were passed on to gardaí.
Ms Kerins said: "In recent months, I have become increasingly concerned about the toll that public controversy has taken on the Rehab Group and my own family.
"While I have dedicated my energies and ability to growing and developing the Rehab Group for the last 22 years, I am of the view that it is in the best interests of all concerned that I step down at this time.
"In doing so, I hope the organisation can focus its entire energies on its core activity of developing and delivering services to people with disabilities and others who are disadvantaged."
Minister for Health James Reilly has said he respects the decision by Ms Kerins.
He repeated his view that anyone called to appear before the Public Accounts Committee appear before it.
Rehab confirmed in February that Ms Kerins was paid an annual salary of €240,000 with a 6% payment towards her Defined Contribution Pension.
She also has use of a company car for which she pays Benefit in Kind tax.
Ms Kerins has a notice period to work out and no decision has yet been taken on whether she will appear before the PAC with other Rehab officials again.
Sinn Féin TD and member of the Public Accounts Committee, Mary Lou McDonald said that despite her resignation, Ms Kerins needed to cooperate with the PAC inquiry.
— Mary Lou McDonald (@MaryLouMcDonald) April 2, 2014
Resignation or not Angela Kerrins must still answer questions around rehab and cooperate with the PAC
Speaking on RTÉ's Today with Sean O'Rourke, she said that she would expect Ms Kerins to cooperate more fully than she had in the past with the inquiry.
Rehab Group divisions receive around €80 million a year in State funding.
Ms Kerins told the PAC in February that Rehab is not a State-run organisation and its staff are not public servants.
She also said her contract can provide a bonus of up to 30%-35% of her salary but she has never received that.
Ms Kerins has worked for Rehab since 1991 and has been chief executive for seven years since succeeding Frank Flannery.
Rehab Chairman Brian Kerr has said Ms Kerins led the group with "dedication and resolve".
"During her two decades with the organisation she has always striven to ensure that those who needed its services received the best possible support," he said.
Minister for Children Frances Fitzgerald said it would be in the interest of Rehab and of the charity sector for Ms Kerins to appear before the upcoming committee meeting.
Speaking on RTÉ's Morning Edition, Ms Fitzgerald said there had been questions that the committee had put that they wanted the people who had been in charge to answer.
She said both Ms Kerins and Mr Flannery should appear before the committee.
Minister Fitzgerald said people needed to get their trust back in the charity sector.
She said there were so many questions put to Rehab and the replies were very slow and there was clearly more work to be done in terms of the questions the PAC had to ask Rehab.
Independent TD Shane Ross said it is very important that there is full transparency on what has been happening in Rehab.
Mr Ross, who is a member of the PAC, said it would be a great pity if the committee came into a collision course with Mr Flannery or Ms Kerins about the situation at Rehab.
Speaking on RTÉ's News at One, he said he hoped that there would be no question of any top-up to Ms Kerin's retirement package, and that she would get what she was statutorily entitled to but no more.