PM's department secretary steps down

The heads of the foreign affairs and prime minister's departments will retire next year, as Malcolm Turnbull appoints a chief of staff.

Secretary of the Department of Prime Minister and Cabinet Michael Thawley. Source: AAP

The head of the prime minister's department, Michael Thawley, will retire in January to return to the private sector.

His departure will be followed six months later by Peter Varghese, who will leave his role as secretary of the Department of Foreign Affairs and Trade to become chancellor of the University of Queensland.

Both men announced their resignations on Tuesday within hours of each other.

Prime Minister Malcolm Turnbull also confirmed on Tuesday his acting chief of staff Drew Clarke - the former secretary of the communications department - would permanently take on the key role in his office.

Department of Foreign Affairs and Trade Secretary Peter Varghese. Source: AAP

Mr Turnbull and Mr Varghese's boss Julie Bishop, the foreign affairs minister, have praised his diplomatic service.

"Mr Varghese is one of Australia's most esteemed public servants and diplomats," Ms Bishop said in a statement.

"(He) has been a constant source of sage advice during a time of significant international challenges."

Mr Varghese has held his current role since 2012 and has served as Australia's high commissioner to both India and Malaysia.

He will take over the role of chancellor from John Story in July.

ABC reported Mr Thawley, who was appointed to the role by former prime minister Tony Abbott, wrote to staff it had "been a highlight of my life to have worked in PM&C with you all over the past 12 months".

"I am very proud of the work we have done together," he wrote.

"But more than anything else I have enjoyed your camaraderie, the sense of purpose and dedication in the department, and the fun we have had in the interstices of the work demands we all face.

"I will be around for another few weeks and we still have some time to talk about what the Government's agenda might be and how we can make our department more successful in its ambitions.

"I expect that an announcement of my successor will be made in the next couple of weeks or so."

The ABC reported Mr Thawley had previously been Australia's ambassador to the US and an executive in the finance industry.

Mr Tunrbull said in a statement Mr Thawley was returning to the private sector, ABC reported.

"I am grateful for Michael's support as my department head and I thank him for his leadership of the APS [Australian Public Service]," his statement said.