"Derek has brought a perspective around digital transformation, people and culture to the Board. On behalf of the Board and Sky shareholders I thank him for his contribution, and his passion for Sky," Bowman said.
Bowman added that Sky will be looking for a replacement as part of an ongoing renewal process.
There has been some controversy regarding Handley's presence on the Sky board. This boiled over at the company's annual meeting in 2018, when a shareholder objected to Handley's role with Sky.
At the time, retail investor retail investor Coralie van Camp noted that "since the government CTO debacle, a lot of information has come out about his business activities that have lost investors a lot of money."
Handley startup Feverpitch had lost investors $3 million, she said, while another, Snakk Media, had seen its value collapse.
Handley defended his business track record during the meeting, saying he had learned from his mistakes.
"I have learned a lot more through my own failures or losses than I have through any successes," he said
"And I think as New Zealanders, we really should value more the growth and the character-building of people's efforts when they don't succeed in the way you hoped - as opposed to taking them down or taking them out of the equation."
Handley was also backed by former Sky chairman Peter Macourt.
Handley's decision to step down from Sky's board comes after the recent departure of the company's chief executive Martin Stewart, who confirmed at the beginning of December last year that he would be returning to Europe.
Stewart had been in charge of the business for 21 months and was replaced by former chief commercial officer Sophie Moloney.
Sky shares were trading at 16 cents at yesterday's market close.
