Hollingsworth, who played a key role in introducing the controversial 'Winning Edge' funding programme, is to leave the Australian Sports Commission (ASC) at the end of September for a job with the Victorian state Treasury.
He had been with the ASC for five years.
"With the Rio Olympics over and as the ASC focuses on the future, now is the right time to take the next step in my career," Hollingsworth said in a statement.
"I made this decision prior to the Rio Olympics and chose to wait until after its completion to make this announcement to avoid any distraction."
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The 'Winning Edge' strategy, which has attracted heavy criticism from Australian Olympic Committee head John Coates, was launched after the 2012 London Games where the country finished eighth overall on the medal table.
The strategy shifted funding away from the centralised Australian Institute of Sport and instead handed money directly to individual sports bodies to make them more accountable for their results.
Critics suggested the funding model would lessen the impact of the lower-profile sports, who said it forced them to focus on immediate medal chances rather than put money into development programmes.
Australia had targeted a top-five finish in Rio with 16 golds but finished 10th with 29 medals, eight of which were gold. The team were criticised by local media after receiving A$332 million(191.83 million pounds) of public funding in the last Olympic cycle.
(Reporting by Greg Stutchbury in Wellington; Editing by Peter Rutherford)
