David Jones chief executive Mark McInnes has tendered his resignation after admitting to inappropriate behavior that was “unbecoming of a chief executive to a female staff member” at two company functions.

The company released a statement on Friday that a female staff worker has made complaints against the chief executive. The termination of Mr. McInnes's contract as CEO and board member was put into effect immediately.

"I have committed serious errors of judgment and have inexcusably let down the female staff member," Mr. McInnes said in a statement.

"I have also let down my partner, my family, all my staff, the board and our shareholders.

"I apologise to everyone I have let down."

Shares of David Jones slipped down to more than 3.3 per cent to $4.4.1 after the chief executive announced his resignation today.

Mr. McInnes said he hoped his immediate resignation will not cause a major impact on the company.

Mr. McInnes worked for David Jones for 13 years and was chief executive for the past seven years.

Meanwhile, the board said they are currently reviewing the staff member's complaint.

"The board has taken and will continue to take steps to ensure that this complaint is appropriately addressed,” said chairman Robert Savage.

Mr McInnes will receive his statutory entitlements of $445,421 and a settlement payment of $1.5 million.

The board has also appointed Paul Zahra to take over Mr. McInnes as new chief executive.

Mr. Zahra's portfolio includes 28 years on retail management and has worked for David Jones for 12 years.

Mr. Zahra said he is thrilled to be working with the company's management committee.