Peden is understood to have employed a my-way-or-the-highway approach. The concern was that such a mindset could limit the development of depth in CNZ's stable beyond Tokyo.
The buck eventually stopped with chief executive Andrew Matheson.
His desire for a more inclusive approach forced Peden's hand.
The decision could place the 2020 Olympic medal dreams of the men's team - Ethan Mitchell, Sam Webster and Eddie Dawkins - and the women's team – Natasha Hansen and Emma Cumming - in jeopardy.
Peden had not responded to NZME requests for an interview at the point of publication, leaving Matheson to front the issue.
"We've just come through the world championships and Commonwealth Games and I guess Anthony decided his time was up with us.
"We respect that, but critically there are two years until the Tokyo Olympics which we're focused on."
So was it a breakdown between Peden and other staff members?
"I can't go into that space," Matheson said.
In the press release, Peden said his approach was not aligned to that of CNZ.
"I can't talk in any detail around that," Matheson said.
"It relates to an employee-employer relationship.
"Anthony's done an amazing job and we thank him for that."
Peden's CV glitters since taking over as sprint coach in September 2013 after Justin Grace had built that arm of the sport in New Zealand from a cottage industry into a world power.
Peden guided the men's trio to three titles and 10 world championship medals, an Olympic silver at Rio and 14 Commonwealth Games podium finishes, including back-to-back golds in team and individual sprint and the development of the women's programme to unprecedented levels with four medals on the Gold Coast.
"They are not soft medals," Peden said at the time.
However, this year's world championships in the Netherlands - a HPSNZ pinnacle event - saw the sprint programme fail to deliver a medal. The men's team slipped to sixth as they tried to peak for two events in five weeks.
"We're in a competitive sport, and sometimes because of our success I think there's a perception we just roll off to worlds and come home with a tin of medals," Peden said post-Commonwealth Games.
"In reality, it's not that easy. Big nations with big budgets are doing some great things. We're doing the best with what we've got."
Matheson said Peden and CNZ had been talking for a while about the coach's future.
"It's been a tough journey through the world championships and Commonwealth Games, so it [Peden's decision] hasn't come out of the blue."
Assistant coach Jono Hamlin will cover Peden's role in the interim, with CNZ expected to go to market in the coming days in a global search for a suitable candidate.
Matheson said he could not comment about whether they would seek out a return for Grace, who is contracted to Britain.
