Mr Chandler's surprise departure in early July was linked to the dismissal of then-trading minister Eleni Petinos after bullying accusations emerged from her office later that month.
Mr Chandler's resignation letter was sent to Premier Dominic Perrottet's office just four hours before the premier sacked Ms Petinos over bullying allegations he had initially defended her against.
Text messages revealed on Thursday showed Ms Hogan describing Mr Chandler's letter as "not flattering" of Ms Petinos.
Customer Service Minister Victor Dominello announced on Friday that Mr Chandler would stay in his role as NSW building commissioner until August next year.
"I am a big fan of David Chandler," Mr Dominello said.
"David is focused on fixing problems and is not afraid to call out bad buildings, bad developers and lack of transparency."
The Urban Development Institute of Australia NSW welcomed Mr Chandler's decision to stay.
"He has delivered the critical reforms needed to rebuild consumer confidence in trustworthy developers," chief executive Steve Mann said.
The NSW construction and general division of the CFMEU also voiced support for Mr Chandler on Thursday, despite not agreeing with all of his actions in the role.
"It was well known in the industry that he was attempting to uphold building standards in construction and trying to ensure dodgy builders were held responsible for defects in properties they built," state construction secretary Darren Greenfield said.
It appeared he upset some members of the government in doing so, Mr Greenfield said.
Mr Chandler's resignation has been a headache for the Perrottet government.
The premier denied reading Mr Chandler's resignation letter before Department of Customer Service secretary Emma Hogan referred it to the state's corruption watchdog, the day after Ms Petinos was sacked.
Mr Perrottet said he read the letter the day before it was released publicly through parliament on August 11.
It noted a problematic relationship between Mr Chandler and Ms Petinos.
The letter also raised concerns about Ms Petinos' relationship with Coronation Property Group, which briefly employed former deputy premier John Barilaro.
Mr Perrottet said he fired Ms Petinos as minister following a conversation with Ms Hogan where further information about her workplace behaviour was presented.
Those allegations motivated the sacking, not the resignation letter, which the premier had not read.
The resignation letter was raised as a peripheral issue that had already been appropriately dealt with, the premier said.
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