Fonterra director Colin Armer has resigned suddenly after six years on the board.
Mr Armer, who has extensive dairy farming interests in both the North and South islands, is understood to have been a strong contender to replace outgoing chairman Sir Henry van der Heyden.
No reason has been given for his departure.
Mr Armer says he continues to be a strong supporter of the country's dairy industry and an advocate for Fonterra's work.
Fonterra says it accepts Mr Armer's decision but is disappointed.
Elections will be held before the company's annual meeting later this year when the vacancy will be filled.
In June, a dairy farm company owned by Mr Armer was fined $72,000 by the Tauranga District Court, after an irrigator caused effluent to pool and contaminate waterways near Maketu in 2010.