Justin Milne has resigned as ABC chairman after his board turned against him and staff threatened to walk off the job.

ABC directors met on Thursday and decided Mr Milne should stand aside while a government investigation took place, which prompted him to resign.

Sources at the ABC said employees had made it clear to board members on Thursday that ABC staff were so angry they were prepared to walk off the job in protest if Mr Milne did not resign.

In an interview with the ABC's 7.30 program, Mr Milne described the week's events as a "firestorm" and said he "wanted to provide a release valve".