"It has been a very happy time for me driving change for the betterment of our region, but sadly my health has other ideas and I can no longer give the energy and commitment that is required to properly serve this council and this community," he said.
"I wish the council well in selecting their new chair and achieving their own unique agenda for the good of our environment and all the people in Hawke's Bay."
It has been determined that Graham's resignation takes effect from Thursday and so Rick Barker will be acting chair from Friday morning.
The Local Government Act empowers Barker to hold all the powers and undertake all the duties of the chair once it becomes vacant until the next meeting of Council on 30 June when the replacement chair will be elected.
Graham said a new generation of "exceptional young people" would lead the region into the future.
"I have enjoyed my involvement with the region's four mayors and I can assure you that the region is in very capable and safe hands," he said.
"We collectively helped our new CEO to change the management environment, building a team that is envied around the country for their intellect, dedication and commitment. They will continue to drive an environmental agenda."
Graham said regional parks have always been high on his priority list, citing his role in the development of the Waitangi Regional Park and Hawea Park as highlights.
He also said he was happy to be present for the creation of Māori wards.
"It was really gratifying that the vote was unanimous," he said. "I have greatly enjoyed my involvement with tangata whenua and despite some cross words at times, I have made some really great and enduring friendships."
In his first term as HBRC chairman, Graham made the decision to stop drilling oil and gas near the region's waterways.
"We lead the nation on this and it is one of my proudest moments," he said.
He also cited his involvement in the Napier Port IPO, which enabled the port to build a new wharf and at the same time, "strengthen council's balance sheet, which is $200 million better off as a result of this deal".
But despite his achievements across his tenure, Graham said "in politics, you don't win all the battles".
"I remain disappointed that we continue to permit the burning of green wood which pollutes our air, especially on the Heretaunga plains with its strong inversion layers," he said.
Council chief executive James Palmer said Graham "worked tirelessly on behalf of the region" to protect and enhance the environment.
"Rex has been very supportive of council staff and a champion for their wellbeing, and we have appreciated his leadership and support," he said.
"We understand the reasons for him standing down and we wish him and his family the very best for his health."
Napier ward member Hinewai Ormsby, who burst onto the scene just 20 months ago as a new councillor, with the highest vote among all wards and already chairwoman of the core-functions Environment and Integrated Catchments Committee, confirmed to Hawke's Bay Today she has developed a keenness to become council chairwoman at some stage, but it's a question of "timing".
She said her passion and commitment in anything in which she gets involved tends to lead to leadership roles, but with the council option it's a case of councillors developing a transition strategy and deciding who is best fitted to lead the council in the foreseeable future.
If asked she said she would have to consider "all sorts of things" including children and family and other roles.
