Michael Malone has told iiNet staff this morning that he will leave the company he founded in his garage in Perth 21 years ago.

Image: iiNet

Malone, who spent the last four months on a sabbatical, had said that he would return to the CEO role when he returned, but told staff this morning that he had made the "difficult decision" to leave iiNet.

"It's certainly a bitter-sweet moment; I make no secret for my love of this company and the people who work here. But the time has come to move on," he said in an email to staff seen by ZDNet.

"Over the past three months, I've had the opportunity to pursue activities I'm passionate about, and taken time out to meet inspired people with new thinking and amazing ideas from across the globe. I've been inspired by this journey and hope I can help young innovators and entrepreneurs build their businesses, using the invaluable experiences I've had over the past two decades."

Malone said it is the ideal time to leave Australia's third-largest ISP, with the company in "the best financial shape it has ever been".

He said that iiNet's acting CEO and chief financial officer David Buckingham, who took over during Malone's sabbatical, has been a strong leader at iiNet.

"He has been the driving force behind our recent acquisitions, delivered profit growth year after year, and has a clear vision for the company's future," he said.

Malone said he is most proud of improving the competition in the telco sector.

"Who knew we'd be neck-and-neck with Optus as the second-largest broadband company in Australia? The truth is that our success rides on your shoulders, and the awesome level of service you deliver our customers, a mantra that will continue long after I leave," he said.

A farewell for Malone is being planned in the company's head office in Perth in the next few weeks.

In a statement to the Australian Securities Exchange, iiNet said Buckingham will continue as acting CEO until the iiNet board can conduct a search for a replacement, stating that Buckingham could be in line for the role himself.

Malone's departure comes following the departure of other high-profile iiNet executives and directors, including Internode founder Simon Hackett and chief technology officer John Lindsay .

More to come.