ABC News director Kate Torney this morning announced her resignation, bringing an end to speculation she was a key internal candidate to replace managing director Mark Scott at the end of his term next year. After 20 years at Aunty, Torney will leave in two months to take up a position as CEO of the State Library of Victoria . Head of newsgathering Craig McMurtrie will be acting director of news while the ABC advertises for Torney’s replacement.

In an email sent to staff, Scott described Torney as a “passionate and inspiring leader of the News Division in a time of remarkable change”.

The first female news director at the ABC, Torney has been a powerful and pivotal figure in driving the ABC’s push to digital news. From the time she became news director in 2009, the ABC has vastly increased its news output through both ABC News 24 and through its website.

She’s been credited by ABC executives as key to maintaining internal support for a broadening of the ABC’s mandate and presence, sometimes against internal opposition. This morning, Scott credited her as the right person to lead the creation of News 24. “It was a task she undertook shortly after being appointed director, and five years later the results are plain for all to see: A dynamic 24-hour news service, watched by more than 4 million people every week.”

“To deliver this continuous stream of quality content across all platforms, the process of gathering and distributing news has been transformed. News staff today are using skills and technology to deliver content in ways not even imagined before Kate started in the role. ABC News is now available to Australians any time and any place, on broadcast, online, mobile and social platforms,” he said. He also paid tribute to Torney’s “warmth and compassion, her generosity as a mentor and her kindness to all in need”.

Torney was a key figure in the ABC cuts last year, when she was forced to defend changes like cutting the state 7.30 bulletins and creating 100 digital news positions at the same time as jobs in legacy platforms and local coverage were being cut. She’s also taken on a role publicly explaining the ABC’s strategic vision alongside Mark Scott, earlier this year speaking at the University of Queensland to address recent controversies about priorities within the ABC. This led some to see her as a key potential replacement for Scott. The ABC has already commissioned high-end global recruitment firm Egon Zehnder to provide a shortlist — the other internal candidate often mentioned is TV boss Richard Finlayson, though he was the executive responsible for the recent Q&A scandal.

At 3pm today, Torney will address the media at the State Library of Victoria about her priorities in the new role.

Torney comes to the Victorian State Library at an interesting time. It was allocated $55 million in the Victorian state budget this year for a major revamp of its operations and spaces, with the library to raise a further $28 million through donations. Part of the five-year redevelopment involves refurbishing Queens Hall as well as the transition to digital technologies. Its board chairman is investment banker John Wylie, who is close to the Andrews state Labor government and has big ideas about how to rethink the role of big institutional libraries in the digital era.