Mr Priestly confirmed he had formally notified council of his decision.
The News understands conflict between his role as a candidate and as a councillor became an issue over his criticism of Federal Water Minister Keith Pitt ahead of a visit to the region and comments on the proposed closure of Campaspe Shire pools.
Mr Priestly confirmed on Sunday that he is no longer a working councillor and had sought to start the process prior to commenting on either issue.
While the request for a leave of absence to contest the federal election won’t be formally accepted until the council meeting on February 15, he is no longer attending council meetings or events.
The Municipal Association of Victoria advice is for councillors seeking election to seek a leave of absence no later than the date of their nomination as a candidate with the relevant electoral commission.
While Mr Priestly has announced his candidacy and has been campaigning solidly, he can’t formally nominate for the seat until the election is called.
He said standing aside now allowed him to focus on what needed to be done to win the seat of Nicholls.
“I want to be able to speak freely on election issues but I don’t want it to interfere with council discussions,” he said.