Auditor-General Martin Matthews has resigned after a critical report about his handling of a fraud case.

"It is with great regret that I have tendered my resignation as controller and Auditor-General," he said this afternoon.

"The issues and speculation about how I handled matters in relation to the fraud committed on the Ministry of Transport during my term as CEO have made it untenable for me to continue in this role."

Matthews said he deeply regretted and apologised for the fraud that was committed on his watch.

"I wished it had never happened but I accept I am accountable for everything done in and by the ministry when I was CEO and I am ultimately responsible."

A report that looked at Matthews' response to fraudulent behaviour while he was head of the Ministry of Transport is due to be released this afternoon.

The report, by senior public servant Sir Maarten Wevers, will be tabled in Parliament at 2pm.

A former manager at the transport ministry, Joanne Harrison, was jailed this year for fraud totalling more than $400,000.

After she was convicted, questions were raised about whether Matthews should have detected the fraud or acted more quickly against Harrison.

Matthews said he felt "as angry and aggrieved as anyone" about Harrison's fraud.

"I have resigned as Auditor-General because I understand the expectations associated with this role are high. It is important to me, and to the office, that the public has complete confidence in the person holding the position of Auditor-General."

New Zealand First leader Winston Peters said the circumstances are regrettable, however anyone holding higher office must be accountable.

He said Mr Matthews' actions as chief executive at the Ministry of Transport were inexcusable.

Mr Peters said the staff who took their issues to Mr Matthews, should never have been treated the way they were.