"I wish Mr Fennessy all the best with his future endeavours," Ms Collins said on September 4, crediting him for stabilising the department during a transitional period.
During a Senate estimates hearing in Canberra on Wednesday, acting secretary Justine Saunders said Mr Fennessy was paid out $899,620, or one year's salary minus superannuation.
Changes in executive roles across government departments were not unusual, Ms Saunders insisted.
"Both the minister and Mr Adam Fennessy, on his departure, made very clear that Mr Fennessy left under amicable circumstances," she said.
Public Service Commissioner Gordon de Brouwer told a different Senate hearing later on Wednesday Mr Fennessy's payout was triggered by an "early termination" of office.
"That's in the case of an involuntary early loss of office," Dr de Brouwer said.
"It's not a resignation ... it's compensation for early loss of office."
Mr Fennessy's early exit occurred under a clause of the Public Service Act requiring the secretary of the Department of Prime Minister and Cabinet to provide a report to Anthony Albanese, who then made a recommendation to the governor-general, Dr de Brouwer said.
He was unable to comment on the reason for Mr Fennessy's early exit.
"The fact there's public money spent in this, that's the reason we're talking about it," Dr de Brouwer said.
"We're fully transparent around the use of public money.
"It's also that (this) involves individuals and they have a right to privacy and out of respect for their privacy, we don't talk about the reasons for someone's departure."
Senior Labor senator Penny Wong referred to the agriculture minister's comments on Mr Fennessy's departure.
"One, these are matters for the prime minister of the day, two, this is not that unusual if you look at the history of government of this country," Senator Wong said.
"This has happened under previous governments too.
"I'm conscious, also, that we're talking about an individual."
Mr Fennessy, who previously led primary industries, environment, water and planning departments for the Victorian government, said he was proud of his work to shake up the federal portfolio during a Senate hearing in 2024.
"Our significant departmental transformation program is continuing. We have engaged staff internally to lift our capabilities across a range of areas, and the department is on a sustainable financial footing," he said in November.
Ms Saunders would act in the role for three months as recruitment proceeds for Mr Fennessy's permanent replacement.
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