Former NSW Labor boss Kaila Murnain says she is sorry to have let the party faithful down after it was announced she had quit her post two months after being suspended on full pay.

The party’s president Mark Lennon emailed ALP members on Thursday morning, telling them Ms Murnain had tendered her resignation as general secretary.

Kaila Murnain has resigned as NSW Labor general secretary. Credit:AAP

Mr Lennon said the terms of her severance payout were confidential but several sources close to the negotiations say the final figure is more than $700,000, including $250,000 in leave entitlements and $468,000 for her legal costs.

The party has agreed to cover her legal bills after she was called before an Independent Commission Against Corruption hearing into an illegal $100,000 political donation.