Nugent's resignation is the latest development in the fallout from swimming's London Olympics disaster.
Swimming Australia (SA) chairman Barclay Nettlefold said Nugent was exhausted, but wanted to stay involved in the organisation.
The body will appoint an interim head coach for next month's Australian titles in Adelaide before filling the role permanently.
"He's exhausted from the process he's been through over the last four years and he just needs to regroup," Nettlefold said.
Asked if the tumultuous events during and after the London Games had taken their toll on Nugent, Nettlefold said: "the last four to six months have been very heavy."
Nettlefold added it was "categorically wrong" to say Nugent was sacked.
The plan is for Nugent to switch to mentoring coaches and help with state development.
"Leigh has more experience in swimming than most people in the world," Nettlefold said.
"He's done a lot of great things and we want to continue to have Leigh in the sport.
"As far as we're concerned, Leigh still had our confidence."
Nugent wore much of the criticism for Australia's dismal showing in the pool at London.
"Leigh accepts responsibility for the team's performance - he's never shied away from that," Nettlefold said.
"I think he felt fairly remorseful."
Nettlefold would not specify whether SA would look overseas for a new full-time head coach.
"We'll be looking as far as we have to, to get the right person," he said.
Nettlefold added Mark Anderson from Hockey Australia is set to take over as chief executive with the peak body down to two final candidates for the high performance director's job.
Australian swimming won one gold medal, six silver and three bronze in London - the lowest tally at an Olympics in two decades.
An independent review released last month blasted a lack of leadership and poor culture within the London swim team.
Days later, five of the six men in Australia's 4x100m freestyle relay team admitted taking the banned prescription sleeping drug Stilnox at a pre-Games camp.
Nugent at the time expressed regret for not acting on complaints from female swimmers that the men's relay swimmers had misbehaved.
Nugent was appointed in March, 2010 and had the role until the end of this year, with a further three-year option to continue to the 2016 Games.
He was previously head coach at the 2004 Athens Olympics where Australia logged its second-best swimming medal haul - seven gold, five silver and three bronze medals - behind the 1956 Melbourne Games.