Department of Enterprise, Investment and Trade head and Investment NSW boss Amy Brown was named in an independent review criticising her involvement in Mr Barilaro's appointment.
Ms Brown, who formerly held the title of department secretary and CEO of Investment NSW, will now take on the CEO position alone, and will report to the secretary, a spokesperson for Investment NSW told AAP on Tuesday.
The spokesperson dismissed reports that Ms Brown had resigned as CEO, saying she had made the changes herself, while secretary, because of the scale of responsibilities created by the dual role.
"Amy Brown, as secretary, made the decision to separate the roles on 11 August, 2022," the spokesperson said.
"These roles have been separated to allow the secretary to focus on a cluster leadership role and an Investment NSW CEO to focus on the core activities of investment attraction.
"Investment NSW can confirm that Amy Brown has not resigned from her role as CEO, nor is it a requirement under the (Government Services Act).
"Due to the scale and significant nature of the work involved in both positions, the role of Investment CEO has been separated out from the secretary role description, title and accountabilities."
Lisa Braid has stepped in as acting secretary and Katie Knight is acting CEO of Investment NSW, while Ms Brown is on leave.
Earlier, a spokesperson for the Department of Premier and Cabinet confirmed Ms Brown was on leave.
The spokesperson said department secretary Michael Coutts-Trotter had begun "formal discussions" with Ms Brown in the wake of the review.
"That process has been paused for four weeks as Ms Brown has taken leave following the intense public examination of her role in the STIC Americas recruitment process," the spokesperson said.
"Her privacy should be respected at this time."
The Senior Trade and Investment Commissioner Americas role came with a $500,000 taxpayer-funded salary to spruik NSW to businesses overseas.
Former trade minister Stuart Ayres resigned this month after a draft excerpt from the Head review "raised questions" about whether he had breached the ministerial code of conduct with his involvement.
Earlier in August, the review into the bungled appointment by former NSW public service commissioner Graeme Head found Mr Barilaro's employment was not kept at arm's length from government.
Mr Head's review found Ms Brown had been indirectly influenced by then-trade minister Mr Ayres' preference for who took the New York-based role.
After the release of the report, Premier Dominic Perrottet said the appointment process was "flawed from the outset".
"The entire process that has been undertaken has been incredibly disappointing," Mr Perrottet said.
