New South Wales' most senior water bureaucrat has resigned less than two months after he was the subject of corruption allegations in an ABC Four Corners report on the Murray-Darling Basin.

Gavin Hanlon on Friday resigned as deputy director-general of water at the NSW Department of Industry.

In July, a Four Corners report aired recordings of Mr Hanlon offering to share confidential government information with lobbyists.

The Four Corners report revealed billions of litres of water in the Murray-Darling Basin that had been set aside to secure the future of Australia's inland rivers had instead been harvested by some irrigators to boost cotton-growing operations.

The report revealed Mr Hanlon secretly offered to share government information with irrigation lobbyists via a special Dropbox account to help them lobby against the $13 billion Murray-Darling Basin Plan.

Signed into law in 2012, the Murray-Darling Basin Plan was a bipartisan agreement about how to use the water in the river system, which runs in Queensland, NSW, Victoria, South Australia and the Australian Capital Territory.

The recording of the 2016 teleconference revealed the NSW Government has been actively considering plans, in discussion with irrigators, to abandon the Basin Plan altogether, and has sought legal advice about doing so.

Mr Hanlon's employment with the department will cease as of Monday 18 September.

Earlier this week, it was revealed that Mr Hanlon was facing misconduct allegations, after a damning independent report.

The report, which probed the allegations of corruption and water theft in the Murray-Darling Basin, was commissioned by the Berejiklian Government.

It found the state's water compliance and enforcement "have been ineffectual and require significant and urgent improvement".

Mr Hanlon had been stood down while the report was completed.

NSW Regional Water Minister Niall Blair was contacted for comment.