Australian Rugby Union chief Bill Pulver will step down from his role once a replacement is found.
His decision to step down came straight after the ARU announced it would be axing the Western Force from the 2018 Super Rugby competition.
The ARU won its arbitration hearing against RugbyWA, but the Force said they would appeal to the Supreme Court.
Billionaire mining magnate Andrew Forrest has pledged to do everything within his powers to save the Force, and the issue is now set to be battled in the courts.
The ARU said the decision to “discontinue the Force’s licence” was based primarily on financial outcomes.
“As we have reinforced throughout this process, there are commercial realities which are linked to declining on-field performance across our Super Rugby teams which has put Australian rugby in a position where it can no longer sustain five teams,” ARU chairman Cameron Clyne said.
“Furthermore, the significant unbudgeted support funding that has been provided to Super Rugby teams over the past five years has greatly affected our capacity to invest in community Rugby.
“This is a sad day for rugby, especially for Western Force fans.
“We accept that there will be anger and resentment over this decision and we sympathise with those fans. We sincerely hope that they are not lost to the game forever.
“The decision to exit the Western Force from Super Rugby is not a decision to abandon the game in Western Australia.
“Western Australia will retain an important place in Australian rugby and the ARU will continue to support youth development programs and the community game in the West.
“There will be a clear pathway for young Western Australian rugby players to reach the highest level and represent the Wallabies.”