Sydney Biennale chairman Luca Belgiorno-Nettis has resigned following pressure over the festival's ties with Transfield Holdings, which manages services in Australia's offshore detention centres.
In a statement, Sydney Biennale announced it would be cutting ties with Transfield Holdings.
“We have listened to the artists who are the heart of the Biennale and have decided to end our partnership with Transfield effective immediately,” organisers of the Sydney Biennale said in a statement.
“With deep regret, the board reluctantly accepted the decision of the chair to resign. We gratefully acknowledge the personal contribution of Luca as chair over the past 14 years. We also acknowledge the enormous contribution of the Belgiorno-Nettis family over 41 years.”
The announcement follows the withdrawal of several artists from the festival over recent weeks due to Transfield's connection to "human suffering".
The company has contracts with the Department of Immigration to provide security and management services on Nauru and Manus Island.
Clashes between security forces and asylum seekers at the Manus Island detention centre last month left one Iranian asylum seeker dead and injured 77 people.
In an open letter last month, 28 Australian and international artists urged the board to abandon major sponsor Transfield.
"We urge you to act in the interests of asylum seekers," the letter said.
Four artists withdrew from the festival on Wednesday, bringing the total number to 10. One of those who had withdrawn, Nathan Gray, welcomed Sydney Biennale's announcement.
"I would really like to see the details and make sure that they're not going to be associating with Transfield anymore," he told ABC's Triple J. "But I think this changes everything and I would be proud to work with an organisation that stands up for human rights in the way the Biennale has done."
Belgiorno-Nettis, who is also an executive director of Transfield Holdings, confirmed his resignation from the Biennale, citing the impact of the growing pressure from artists on the festival.
“With many of the participating artists now torn between loyalty to our creative director and wanting to make a stand against this government policy, the core spirit of the festival is under a dark cloud,” he said in a statement.
“There would appear to be little room for sensible dialogue, let alone deliberation. Yesterday I learnt that some international government agencies are beginning to question the decision of the Biennale’s board to stand by Transfield.
"Biennale staff have been verbally abused with taunts of ‘blood on your hands’. I have been personally vilified with insults, which I regard as naïve and offensive. This situation is entirely unfair – especially when directed towards our dedicated Biennale team who give so much of themselves.”