Head coach Daryl Gibson has left the Waratahs after opting against seeing out the final year of his contract.

Gibson stepped up to take the top job in 2016 following a three-year spell as assistant to Michael Cheika.

The former New Zealand centre decided to move on after the Waratahs failed to reach the Super Rugby quarter-finals.

"I've been incredibly invested in this team and NSW Rugby for the past seven years," said Gibson.

"It wasn't an easy decision, but one that I think is in the best interest of the team, myself and my family.

"I'm proud to have served as head coach for that period, this is now a wonderful opportunity for someone to bring the next generation of young players through and really own that process for the next three or four years.

"I will take away some fantastic shared memories, new friends and a feeling I have contributed to the wider development of rugby in New South Wales.

"I've received tremendous support from our chairman, CEO, captain and senior players during my time here. It's been a steep learning curve and I take away some valuable lessons that will serve me well into the future."

Gibson revealed he spoke to Cheika over a role as Australia assistant coach before Shaun Berne was appointed on Friday.