SYDNEY Australia's central bank is set to lose a top official to the private sector amid a broader shake-up that could soon see its chief replaced.

Westpac announced on Monday that it has appointed Reserve Bank of Australia (RBA) assistant governor Luci Ellis as Westpac's chief economist, starting on Oct. 9, and she will replace Bill Evans, who has been the chief economist since 1991.

Ellis's departure from RBA comes amid the biggest overhaul of the institution in decades, with Treasurer Jim Chalmers set to decide this month whether to extend Governor Philip Lowe's current term following a review.

Lowe has been under a cloud since repeatedly saying in 2021 that interest rates would not rise until 2024, only to reverse course and hike in mid-2022 when inflation unexpectedly surged.

A review commissioned by the government in April outlined a range of reforms from a more focused policy mandate, to fewer policy meetings and a separate board for the bank's day-to-day operations.

Ellis was head of the RBA's Financial Stability department for eight years before assuming the Assistant Governor role in 2016.

Other recent high-profile departures from the bank include Jonathan Kearns, former head of Domestic Markets department who joined investment firm Challenger in March.

Terry McCrann, a News Corp columnist and veteran commentator on RBA matters, wrote in The Australian newspaper on Monday without citing sources that the government would announce the appointment of the next governor later this week and that Lowe would not have his term extended.

A spokesperson for the Treasurer declined Reuters' request for comment.

(Reporting by Stella Qiu; Editing by Muralikumar Anantharaman and Sam Holmes)