The call follows a fiery late-night hearing at senate estimates, over the federal funding body's decision to ditch the team picked to represent Australia at the Venice Biennale.
Ms Hanson-Young argues the continuation of Chief Executive Adrian Collette and the board in their roles is untenable.
"It's a shemozzle, and it has thrashed Australia's reputation in the arts world, right across the globe," she told reporters Wednesday.
Mr Collette and board chair Robert Morgan for the first time faced intense questioning about the decision, which has caused uproar in the arts world.
Each confirmed they did not intend to resign over the furore.
"That's really not the way I work. I'm sorry if this decision is misunderstood by the sector, but I don't back away from this stuff," Mr Collette said.
During the hearing it emerged that Creative Australia had formally terminated its contract with artist Khaled Sabsabi and curator Michael Dagostino at 4.30pm on Tuesday, just four hours before the arts chiefs began their evidence.
The Creative Australia board decided to revoke the Venice invitation on February 13, following questions in parliament earlier that day regarding two of Sabsabi's early artworks.
They featured the September 11, 2001 attacks on the United States, and the late Hezbollah leader Hassan Nasrallah.
Over hours of questioning, it emerged that there were no dissenting voices during the urgent 90-minute board meeting held on the evening of February 13.
Mr Collette said he had relayed to the board that Arts Minister Tony Burke had been shocked by the 9/11 artwork, while chair Robert Morgan said the risks of inaction were clear to everyone at the meeting.
"We considered this video would become prominent, divisive and would escalate in an urgent way," Mr Morgan explained.
The board did not specifically consider legal risk before overturning the selection of the Venice team, while Mr Collette said he did not have time to talk to a lawyer before informing the artist his invitation had been rescinded.
The veteran arts administrator also acknowledged that taxpayers would foot the bill for Creative Australia's financial obligations to Sabsabi and Dagostino.
It has also become clear that Creative Australia's leadership had little knowledge of Sabsabi's previous work before he was selected for Venice.
Mr Burke, who was represented by Labor Senator Tim Ayres at the hearing, had been given a brief on the Venice commission prior to its announcement, but it did not include mention of either of the controversial artworks.
Liberal Senator Claire Chandler - whose foray in Question Time sparked the controversy two weeks ago - asked about Creative Australia's due diligence, to be told it did not search artists' back catalogues when considering future commissions.
Mr Collette admitted Creative Australia was facing a huge job to restore confidence in its decisions, and said he felt the concern of the arts community strongly.
As for Australia's showing at Venice in 2026, it is likely the national pavilion will stand empty given the widespread anger in the artistic community.
Mr Collette said he had not spoken to any other artists about replacing Sabsabi and Dagostino, but Creative Australia would do everything it could to mount a worthy exhibition.
"We have to draw breath and work out how we are going to approach this singular situation," he said.
More than 4000 people, including some of Australia's most respected artists, have also called for Sabsabi and Dagostino to be reinstated.
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