Ms Holgate said she accepted that her decision to purchase the Cartier watches,worth $20,000,amounted to poor"optics"for the government-owned company.
"I deeply regret that a decision made two years ago,which was supported by the chair,to recognise the outstanding work of four employees has caused so much debate and distraction and I appreciate the optics of the gifts involved do not pass the'pub test'for many,"she said in a statement.
Her resignation comes amid a four-week federal government investigation into Australia Post's expenses and governance culture. It was triggered by her admission to a Senate estimates hearing that she gave the watches as gifts to four employees in2018 for landing a major deal with three of the big banks.
The revelation angered Prime Minister Scott Morrison and fuelled a perception of largesse inside the organisation as it grappled with a string of expenses-related scandals.
These included Ms Holgate's $300,000 spend on corporate credit cards and chauffeur-driven cars in the 2019/20 financial year and her decision to pay areputation management firm $119,000 for just 38 days' work for the organisation between June and July.
She also came under scrutiny for intervening on Senator Pauline Hanson's behalf when the City of Melbourne refused to deliver One Nation stubby holders to locked down public housing tower residents.