The head of the agricultural agency being relocated to Deputy Prime Minister Barnaby Joyce's electorate has quit.

Key points: Kareena Arthy quits amid tensions over move to Armidale

Kareena Arthy quits amid tensions over move to Armidale Relocation strained relationship with Deputy PM Barnaby Joyce

Relocation strained relationship with Deputy PM Barnaby Joyce Labor MP Joel Fitzgibbon says Ms Arthy's departure evidence the agency is "crumbling"

The ABC understands the Australian Pesticides and Veterinary Medicines Authority's (APVMA) chief executive, Kareena Arthy, handed her resignation letter to Mr Joyce's office on Thursday afternoon.

It comes amid ongoing furore over Mr Joyce's decision to move the agency from Canberra to Armidale, in his own electorate.

The move has strained Ms Arthy's relationship with Mr Joyce, who might be pleased by a changing of the guard.

Ms Arthy has led the national chemical regulator since 2013 and is credited with improving its efficiency, including faster approval times for products.

She has been given a senior role within the ACT public service — and her resignation leaves the APVMA without a leader at a critical time.

Mr Joyce announced the move during the last federal election, causing widespread allegations of pork-barrelling.

A cost benefit analysis found the move would slug taxpayers with a $25.6 million bill.

Ms Arthy confirmed in senate estimates in February that one in five regulatory scientists had already quit the APVMA as it forged ahead with the move away from Canberra.

She told the hearing that despite offering incentives to staff, she was finding it difficult to recruit people for the move.

'This thing has to stop,' Labor says

Labor's agriculture spokesman Joel Fitzgibbon said Ms Arthy's decision to leave was further evidence the move was a mistake and the agency was "crumbling".

"I fear that many people will follow Kareena Arthy," he said.

"The authority's already lost more than 50 per cent of its staff and more will surely go — this thing has to stop."

He called on Prime Minister Malcolm Turnbull to reverse the decision to relocate the APVMA.

"We probably won't get Kareena Arthy back; we probably won't get many of the scientists and regulatory lawyers who have already left," he said.

"But it's not too late," he said, urging Mr Turnbull to "intervene quickly".

Farmers and the chemical industry have campaigned against the APVMA relocation and warned there would be an impact on agricultural productivity and efficiency if the assessment of new products slowed.

Arthy headed to ACT public service

ACT Chief Minister Andrew Barr told ABC Radio Canberra on Friday morning Ms Arthy had been offered a role with the ACT public service.

An all-staff email sent to ACT public servants shortly afterwards announced she would take on the role of deputy director-general of Enterprise Canberra — a body within the Economic Development portfolio tasked with improving the liveability and productivity of the city.

Ms Arthy will begin the role on June 1.

Mr Barr urged Canberrans not to panic about the Federal Government's decentralisation plans.

"I want people to calm down just a little — at this point I think there is scope to achieve the decentralisation agenda without damaging Canberra," he said.

The ABC understands Ms Arthy's contract with the APVMA was due to conclude at the end of this year.