Stephen Parry announced his departure after failed mediation and months of tension with Mayor Ben Bell, who was elected a year ago.
He was due to leave at the end of this month, with the council considering the appointment of an interim chief executive last night.
Many tipped deputy chief executive Rex Capil to take the job, but on Tuesday he also resigned.
Now, councillor Stewart MacDonnell has confirmed Parry has been appointed to the interim role and will remain with the council beyond October.
Parry has a frosty relationship with Bell, who was the country's youngest mayor when elected, aged 23.
RNZ revealed in March that the pair had not spoken in months and entered mediation in December last year, though the process quickly fell apart.
The standoff culminated in a group of councillors calling on Bell, then 24, to resign, while a ratepayer started a petition calling for Parry to resign as chief executive.
Earlier on Tuesday a council spokesperson said: "the council was committed to ensuring a smooth transition from outgoing chief executive Stephen Parry to a new chief executive, and having the right interim chief executive was critical to achieving this".
Capil will leave the council next month to take up another role, the spokesperson said.
In his resignation letter, Capil hanked Parry for his support.
"I came to the council to work with you, and I have enjoyed the chance to do that.
"The senior leadership team and staff are fantastic and again I have valued the opportunity to be part of a very special staff at the council. A fantastic team and a fantastic work environment from an operational perspective."
Capil was a central figure during the breakdown in Parry and Bell's relationship.
He was the senior staff member at a meeting behind closed doors where the relationship was discussed.
A vote of no confidence in Bell was brought up during the meeting, though it did not reach a vote.
Capil misled the media about those discussions, stating in an email to RNZ that "no motion was tabled or discussed".
