Student Loans Company head Ed Lester will stand down when his contract expires next year in the wake of controversy over his tax arrangements.
Lester was paid through a company in order legally to reduce his liability for tax until ministers intervened in February this year.
The Student Loans Company said his contract expires at the end of January next year and work had begun to recruit his replacement.
A Student Loans Company spokeswoman said: "Ed Lester's two-year contract ends on 31 January 2013.
"The process to recruit his replacement is under way now to ensure that there is a smooth handover in the change of leadership at the Student Loans Company."
The arrangement for Lester's pay was disclosed in an HM Revenue and Customs (HMRC) letter obtained under the Freedom of Information Act by Exaro News and BBC Newsnight.
Following the revelations in February, Treasury Chief Secretary Danny Alexander said the way in which Lester received his £182,000 salary would be changed and launched a review of similar arrangements across Whitehall.
The review identified more than 2,400 cases of public sector staff being employed indirectly - some potentially avoiding full income tax for a decade or more.
Since January, 350 such contracts have been ended and tighter rules have now been introduced.
Yesterday Alexander said everyone in the public sector "should be on the payroll and paying the correct amount of tax".