Walsh was involved in a number of high-profile work and personal incidents which threatened to derail his career in New Zealand and five years ago he moved across the Tasman five years ago to resume his refereeing.
"I will be forever indebted to Australian Rugby for including me so openly following a difficult period for me personally. I would also like to acknowledge my time with New Zealand Rugby. Their decision to end my contract in 2009 was challenging, but was ultimately the best thing has ever happened in my life. It made me confront who I was and how I carried myself."
Australian Rugby Union CEO Bill Pulver said: "On behalf of everyone at the ARU, I would like to wish Steve all the best in his future endeavours. His departure is a big loss to Australian Rugby and the game globally, but we fully respect Steve's decision to pursue his own personal dreams and wish him well. In making this significant decision, Steve has displayed a strong level of integrity and respect for the game.
"Steve has been a terrific ambassador for Australian Rugby - whether it be at Six Nations games on the other side of the world, in the spotlight officiating World Cup games or refereeing Super Rugby fixtures - living the core values of our sport day in, day out and inspiring the next generation of match officials in this country.
"We now look forward to continuing to support the development of our next tier of match officials to reach and hopefully exceed the levels attained by Steve through his career."