Finding a replacement could cost ratepayers $20,000 if more than one nomination is received.
The resignation came shortly after the Otago Daily Times' request for councillors' attendance records following close scrutiny of the district's representation over the past few months as part of a representation review.
When contacted by the Otago Daily Times yesterday, Mr Hargest said increased work commitments meant he could no longer serve on the council.
Mr Hargest is the manager of the Balclutha and Milton branches of Westpac bank, and a justice of the peace.
He said his workload as bank manager had increased since overseeing the Milton branch, and said the banking industry was becoming much busier.
"I've really enjoyed my time on the council. It's been a tough decision to make."
Clutha Mayor Bryan Cadogan said he appreciated Mr Hargest had work commitments and wished him all the best.
"I hope that Balclutha residents will make the most of what has happened and form a robust by-election. If anyone is thinking, 'Maybe I will stand', give me a call. Let's get the best candidate."
Mr Hargest was elected as a councillor for the Balclutha ward in 2007, and re-elected in 2010.
Since the October 2010 election, Mr Hargest has been paid $18,979, attending 52 out of 74 meetings.
He said he would miss the youth council, with which he had been involved since he was first elected in 2007; and interactions with councillors.
"I'm really keen on the main street upgrade, and the youth council who are a passionate group of young people. I'll be sorry to miss those."
Last October, Bruce ward councillor Bruce McCorkindale resigned to take up a new full-time job as agri-manager at the Mosgiel branch of the National Bank. Joanna Lowery was elected in February to fill the vacancy, after running against three others in a by-election costing ratepayers $14,357.
Council corporate services manager and electoral officer Alan Dickson said the council would call for nominations on Thursday, and the electoral roll would be available for inspection. Nominations would close on August 16, and the first voting papers would go out on September 12. Any by-election would take place in October.
If only one name was put forward, that person would be automatically elected and no by-election would be held.
A by-election could cost up to $20,000, Mr Dickson said.
The elected representative will join Balclutha ward representatives Crs Hamish Anderson, Ron Davis, and Mary Johnstone.
