Paul Appleby is to remain on in his position as Director of Corporate Enforcement for six months pending the appointment of a replacement.
It is understood he agreed the measure with the Government today to facilitate a smooth transition to a replacement and his continued leadership of the investigation into Anglo Irish Bank.
Earlier, Mr Appleby announced that he will retire from his position at the end of February. He has held the position for the last ten years.
Mr Appleby had said his decision to retire would not impede the office's work in the Anglo Irish Bank investigation and said if his assistance were required, he would make himself available.
He said he had advised Richard Bruton, the Minister for Jobs, Enterprise and Innovation that there were a number of staff in the ODCE who were ''well capable'' of assuming his position in an acting capacity until a permanent appointment was made.
''While there can be no perfect time to retire from a demanding role like that of the Director of Corporate Enforcement, I am satisfied that my leaving the post at this time need have no adverse consequences for the valuable work of the office,'' Mr Appleby said in a statement.
Mr Appleby, who is 57, will be paid a retirement lump sum of €225,000 and have an annual pension of €73,000 following his 39 years of service in the civil service. He will receive the first €200,000 of his lump sum tax free.
His current salary, which is in line with pay for an assistant secretary general for a government department, is €146,000. It was reduced from €150,000 in January 2010.
By leaving next month, he will receive his lump sum and pension calculated on his salary before it was cut in 2010.
The Minister for Public Expenditure & Reform, Brendan Howlin, said he was surprised to be told of Mr Appleby's decision. But he said the Government was determined that the huge volume of work done on important investigations by his office would not be affected by his departure.
It is understood the department was notified of Mr Appleby's decision only this morning. The Government had originally sought three months' notice from public servants intending to retire under the current arrangement.