Public Service Commissioner John Lloyd has resigned amid questions over his conduct.

Mr Lloyd has advised the Governor General he will step down in August.

He was responsible for ensuring the bureaucracy complies with its code of conduct, and has previously been criticised for his links to the right-wing think tank, the Institute of the Public Affairs.

In January this year, the Department of Prime Minister and Cabinet referred an allegation that Mr Lloyd breached the Public Service Code of Conduct to the the Merit Protection Commissioner, Mark Davidson.

The allegation was deemed serious enough to be considered by the watchdog.

But Mr Davidson was only acting in the role when the allegation was brought up, and because it involved one of Australia's most senior public servants, he wanted the decision to be made by a permanent commissioner.

Weeks later, with Mr Davidson still acting in the role, he reportedly became concerned that sitting on an important allegation did not look good, and so asked a former department secretary to help decide if a formal investigation is necessary.

Currently, the nature of the allegation and who made it remain unknown.

Some have criticised Mr Lloyd's ongoing correspondence with members of the Institute of Public Affairs as a sign of partisanship.

He has defended his links with the organisation several times.

He refused to answer questions about the possible investigation into his communications with the IPA.

Mr Lloyd's last day will be August 8.