The council said Ingrid Gallagher had retired from Brecon High School to "pursue other professional interests".
Mrs Gallagher was suspended in April after six one-day strikes by teachers over compulsory redundancies.
She said she would miss staff and students, but was confident the school will go from strength to strength.
In April, Powys council said Mrs Gallagher had been suspended while an inquiry took place "into concerns that have been raised".
It said the decision was "neutral" and was not disciplinary action.
'Stength to strength'
It followed industrial action by union members against six job cuts, with two posts lost through compulsory redundancy.Mrs Gallagher said: "I will miss the students and staff at Brecon High School but I am confident the school will go from strength to strength and I wish them well for the future.
"My change of career will allow me to spend more time with my family."
The council said during Mrs Gallagher's five years in charge at Brecon High she had successfully raised academic standards and had been responsible for many innovations.
The teaching union the NASUWT said it understood Mrs Gallagher had resigned.
Spokesman Rex Phillips said: "It was the only course of action open to her given the problems that had been created at the school during her time as head teacher."
The union had accused the school's governors of financial mismanagement and said they had turned a ?100,000 surplus into a projected ?650,000 deficit in three years.
The school denied it had failed to take action to address a budget deficit, which it claimed was caused by a reduction in funding.
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