The Queenstown Lakes District Council-controlled organisation announced Mrs Taylor had resigned from the post on Friday but would remain as a director.
"Jane Taylor has requested that she be able to step down from the chair position to allow more time to dedicate to other commercial and personal interests," QLDC chief executive Duncan Field said in a statement.
"Jane has been an excellent chair and showed considerable skill in bringing the board and staff together in a coherent team."
Fellow Lakes Leisure director Mike Saunders, a retired businessman and farmer of Wanaka, has become chairman.
During the full council meeting last week, councillors adopted the recommendation that Lakes Environmental would not replace co-director and Queenstown barrister John Matthews, who resigned and was appointed chairman of commissioners by the council in February.
The Lakes Leisure board was invited to propose "a means and timetable" for also reducing its number to four.
Director Richard Beddie volunteered to resign "as an amicable solution", the board's statement said.
Both Mr Field and Mrs Taylor recorded their appreciation to Mr Beddie for supporting the council in its request for a reduction in the size of the board.
The changes will reduce the remuneration pool for directors, dropping the costs of governance to the companies by about $21,000 for Lakes Environmental and $18,000 for Lakes Leisure.
During the council meeting, regulatory and corporate services general manager Roger Taylor reported that when Lakes Environmental was formed in March 2007 and Lakes Leisure in January 2008, both boards needed five directors to handle the changeover and set up the companies.
"The establishment goals of both boards have now largely been achieved and, following the resignation of John Matthews from the Lakes Environmental board, it is timely to consider the ongoing board sizes and, particularly, whether a reduction in size is appropriate," Mr Taylor reported.
Company constitutions stipulated the number of directors for Lakes Environmental should be between three and six and for Lakes Leisure between three and seven.
The Lakes Environmental board consists of chairman Tony Hill, Anne Urlwin, Dr Nick Brown and Alan Bickers. The Lakes Leisure board will consist of chairman Mike Saunders, Jane Taylor, Peter Faul and Jeff Turner.
