Ben Ekumbo, the official reportedly found hiding under a bed in his home in Nairobi as part of an investigation into stolen kit, has resigned as President of the Kenyan Swimming Federation.
It is the latest twist in an increasingly contentious process to overhaul the running of sport in the country.
Ekumbo plans to step down officially once an Interim Committee consisting of four members of the national body's Executive Committee has been convened to replace him.
It is not yet clear if he will also relinquish his position on the International Swimming Federation's (FINA) ruling Bureau.
The official, who is also first vice-chairman of the National Olympic Committee of Kenya (NOCK) and served as deputy Chef de Mission at Rio 2016, was arrested in November after investigators raided his apartment in the capital city.
He was held for three days before being formally charged with the theft of money and kit meant for the African nation's team.
It is alleged that he stole $10,500 (£8,400/€10,000) worth of athletics shoes, tracksuits and bags supplied as part of Kenya's sponsorship deal with clothing giants Nike.
Ekumbo vowed to return the money and claims it was deposited into his bank account without him knowing.
It has not been confirmed if he has done this.
"After serving the Federation for over a period of 34 years in various capacities and eventually as chairman since 1996, I now deem it fit and necessary to announce my RETIREMENT from the position of national chairman after the following process is completed," he said in a letter obtained by insidethegames today.
This "process" includes the convening of a Special General Meeting by "the end of January 2017 (or thereafter)" to decide on the way forward.
No specific mention is made of the allegations against him.
"My decision is after several consultative meetings with various personalities and stakeholders and after obtaining pertinent views, have agreed on the way forward," he added.
insidethegames has contacted FINA to ask if they expect Ekumbo to remain on the ruling Bureau.
It comes after the world governing body claimed this month to be "satisfied" with what it describes as "robust measures" taken against ruling Bureau member Coaracy Nunes, the Brazilian Aquatic Sports Confederation President fined BRL$20,000 (£5,000/$6,200/€5,900) last month by the Court of Audit of the Union for improper application of funds.
This comes after all NOCK officials except for President Kipchoge Keino were arrested after Kenyan Sports Minister Hassan Wario disbanded the organisation in August following a catalogue of problems during that month's Olympic Games in Rio de Janeiro.
A reform process mediated by the International Olympic Committee (IOC) has since experienced numerous delays.
Elections have been pushed back to March after a failure to reach an initial December deadline, as longstanding officials close to Keino clash with a new guard of administrators seeking more sweeping reforms.
A draft constitution has not yet been approved by the IOC as disagreement continues over a clause on whether serving Executive Committee members will retain voting power.
Reform group leader Andrew Mudibo, the interim secretary of the NOCK-affiliated Federations, has requested that the IOC send a representative to ensure the credibility and acceptability of the process.
The IOC has always been held in high regard in terms of good governance," Mudibo wrote in his latest letter dated January 13, seen by insidethegames.
"It is a shame that the outright slaughter of good governance and impunity being exhibited by NOCK can be allowed to continue without any meaningful measures or sanctions being taken on the NOCK Executive, while its affiliates and public continue to seek justice so that a transparent process can be carried out."