Ipswich Mayor Paul Pisasale was recently stopped at Melbourne Airport with $50,000 cash, police sources say, with the long-serving civic leader announcing his resignation due to ill-health on Tuesday.

Key points: Paul Pisasale has been Ipswich Mayor since 2004

Paul Pisasale has been Ipswich Mayor since 2004 CCC, police conducted search of his office on Monday

CCC, police conducted search of his office on Monday Deputy Mayor Paul Tully will step in until a by-election can be held

Mr Pisasale's decision to step down from the city's top job comes a day after Crime and Corruption Commission (CCC) officials and police searched his office as part of an unfolding investigation.

Police sources have confirmed Mr Pisasale was stopped at Melbourne Airport last month with $50,000 cash, after a one-night trip on official business interstate.

Mr Pisasale is currently being treated at St Andrew's Ipswich Private Hospital following a multiple sclerosis attack, and made the announcement at a press conference wearing red-and-white polka dot pyjamas and a white robe.

Deputy Mayor Paul Tully will become the acting mayor for three months until a by-election is held.

Mr Pisasale said he was unaware of any looming matter with the CCC.

"Over the years I've cooperated wholeheartedly with the CCC and I intend to continue to do that," Mr Pisasale.

Loading

Mr Pisasale said he was hospitalised on Thursday after an MS attack.

"Sometimes you think you're bulletproof ... when multiple sclerosis starts affecting your judgement and your ability to do your job 100 per cent its time to look after it.

"After 25 years and not having a weekend off and not having a holiday and getting so engrossed in the city it does take its toll.

"Now it's my time to look after my health."

He said he had been discussing standing down with Deputy Mayor Paul Tully over the past month.

Mr Pisasale said he would remain involved in the city.

"I'm not leaving the city, I'm not a councillor, pretty soon I'll just be Paul Pisasale".

Police, CCC visit Mayor's office

The CCC confirmed it executed a search warrant at Ipswich City Council on Monday.

"The search was related to an ongoing CCC investigation," it said in a statement.

"As the investigation is ongoing, it is not appropriate for the CCC to comment further."

Cr Tully said police officers went to Mr Pisasale's office on Monday looking for "particular materials".

"There were officers from the CCC including police officers working for the CCC who were there yesterday afternoon," Cr Tully said on Tuesday.

Cr Pisasale made the announcement dressed in a white hospital gown. ( ABC News: Josh Bavas )

He said he believed officers also went to Mr Pisasale's home.

Cr Tully said he only knew "bits and pieces" about the investigation.

"I'm not aware that there's any allegation against the Mayor, any claim of any wrongdoing, that it's a fact finding and information gathering exercise at the moment.

"The speculation needs to be careful in the sense that in any sort of investigation people may be witnesses, people may have some material or information. From my very brief discussions with the Mayor there may indeed be wider issues here.

"I understand it's quite separate to Operation Belcarra, that that was looking principally at election issues, that this is a separate matter."

Cr Tully said it had come as a major shock.

"All of the councillors came up to see him earlier this morning, and there were tears in the eyes of just about every other councillor," he said.

Mr Pisasale was first elected to council in March 1991 and appointed deputy mayor in April 2000.

He has subsequently been elected four terms as mayor since 2004.

In the 2016 election he was re-elected with more than 80 per cent of the vote.

In April he faced a CCC public hearing into alleged corruption at the 2016 elections, where he defended his reliance on developers to help fund his campaigns.

In 2015, he was cleared by the corruption watchdog of allegations he failed to declare gifts and donations and misused a charity fund.