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Mr Ker (67) told staff of his decision on Thursday and said it was the right time to step down.
The organisation’s chief advised the polytechnic’s council last year he would not seek renewal of his contract.
"I’m coming up 15 years at the polytechnic and I just felt it was time for someone else to take over the helm."
He told the Otago Daily Times he was extremely proud of his time at the top.
When he took on the role as chief executive the polytechnic had just been through a central government review, known as a Business Recovery Programme and was in a bad position financially.
It now regularly tops the sector in student accomplishments and teaching performance as well as being much stronger financially.
Radical changes are expected in the sector when the results of a government review are announced in the next two weeks, though the implications of the review on the Otago Polytechnic were not yet known, he said.
"They are definitely radical changes coming and radical changes are never quick, it’s going to take three to five years to work through, so it’s time for new blood to come in for that lengthy adaptation process."
He hoped to be able to continue to contribute to the polytechnic and the education sectors in some capacity.
"I’ve been in this sector for 45 years and I think it’s time just to not go full bore all the time."