Kate Palmer is set to step down from one of the most important roles in Australian sport after electing not to seek to renew her contract as chief executive of Sport Australia.

Palmer has been in the role since 2017 and her contract expires on January 31 next year. It means a new face in charge of the nation's peak sporting body, which is in charge of funding of elite sports among other responsibilities.

The move was announced in a joint statement from the Sport Australia board and Palmer, who said she was proud of what she was able to achieve in her tenure.

"I believe in, and am pleased with, the progress we have made in helping Australians to become more active, in improving the physical literacy of children, and driving governance and management improvement across sport," Palmer said.