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The Reserve Bank of Australia will get its first woman leader as Philip Lowe's seven-year tenure comes to an end.

Dr Lowe will be replaced by Michele Bullock, the current deputy governor of the central bank, when he finishes on September 18.

Ms Bullock has served as deputy governor since April last year after a near four-decade RBA career, which has included several senior positions.

Prime Minister Anthony Albanese said Ms Bullock was "eminently qualified" to lead the national institution.

"Michele will be in an important job at an important time with the challenges we face globally," he said on Friday.

Ms Bullock said she was deeply honoured to be appointed.

"It is a challenging time to be coming into this role but I will be supported by a strong executive team and boards," she said in a statement.

The prime minister thanked Dr Lowe for his seven years of service, particularly for his efforts to support the economy during the COVID-19 pandemic.

The government considered a shortlist of candidates that included Ms Bullock, Treasury secretary Steven Kennedy and Finance secretary Jenny Wilkinson.

Treasurer Jim Chalmers said Ms Bullock represented the best combination of experience and expertise along with a fresh leadership perspective.

"This is the right call but it's not an easy call," he said.

Dr Lowe was at the helm of the bank throughout the turbulent pandemic period but it was during the recovery phase that his leadership landed him in hot water.

His prediction interest rates would stay on hold at low levels until 2024 attracted criticism after the RBA lifted rates much earlier in response to fast-rising inflation.

The governor later apologised for not adequately communicating the caveats attached to his guidance.

Dr Lowe has also been in the top job throughout an independent review and confirmed the bank would act on most of the recommendations in a speech earlier in the week.

Dr Chalmers said Dr Lowe had handled the pandemic period in an "impeccable" way, noting that lengthening an RBA governor's tenure was an "exception rather than a rule".

Ms Bullock will have the challenging job of steering the central bank through a major reform era as well as the unfinished task of returning inflation to target.

Inflation has passed its peak but was still growing at 5.6 per cent annually in May, well above the two-three per cent target range.

Former treasury official and economist Steven Hamilton said Ms Bullock was the best option but there was a valid argument to bring in an outsider to "shake things up" in light of the review findings.

He told ABC TV the decision to go with an insider, who was still able to implement change but unlikely to "scare the horses", was the right one given the uncertain economic environment.

But Mr Hamilton said Dr Lowe should not be criticised for lifting interest rates to tackle high inflation as the RBA has been doing since May last year.

Grattan Institute chief executive officer Danielle Wood was not surprised Dr Lowe's term ended in light of the review findings.

"It would be very unfortunate, though, if it was in any way a reflection of very difficult decisions the bank has had to make over the past year," she said.

Opposition Leader Peter Dutton said he did not want a senior public servant appointed to the role, arguing that the relationships between senior ministers and top bureaucrats was too cosy.

But the treasurer said the opposition leader was "relentlessly negative" and now "bagging things that aren't even happening".

Dr Chalmers and Dr Lowe are still expected to travel to India on Monday for a meeting of the G20 finance ministers and central banks.

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NAB staff have secured working from home rights and pay rises totalling 17.5 per cent over four years as part of an "industry-leading" enterprise agreement.

Following a marathon 16 months of negotiations, the Finance Sector Union has recommended employees vote to accept the agreement, which includes a working from home clause featuring conditional support for and encouragement of the practice.

The clause sets out a process for employees to apply for and establish WFH arrangements and puts limitations on the ground for NAB to refuse a request to work from home.

It also allows access to a dispute process, with escalating the matter to the Fair Work Commission the final step if a WFH request is unreasonably refused.

The agreement details a two-week notice period for any changes to work from home arrangements other than for exceptional circumstances.

NAB workers have also secured pay increases totalling 17.5 per cent between 2023 and 2026 for the lowest paid staff under the agreement.

The bank will guarantee rises for all workers up to the "high income threshold" and improve transparency of annual salary increase budgets.

Those earning more than the high-income threshold will have a right of dispute.

The deal is a win for NAB workers who last year rejected an unfair offer, Finance Sector Union national secretary Julia Angrisano said on Friday.

"Union members, acting collectively gave the NAB a clear message that they deserved better pay rises than the bank was prepared to pay them and by standing their ground, they have achieved a much fairer outcome," Ms Angrisano said.

"More than 80 per cent of NAB staff have now secured guaranteed fixed salary increases instead of relying on NAB's market-based model which eroded our members' standard of living."

NAB has also agreed to increase parental leave entitlements and introduce measures to address the gender pay gap, including by paying superannuation on paternity leave.

The agreement includes Aboriginal and Torres Strait Islander leave; recognition of menopause, menstruation and mental health; and, an ongoing committee to address job security.

Union members working for the Commonwealth and ANZ banks expected their employers to meet the benchmark set by NAB, Ms Angrisano said.

Earlier this week, the Finance Sector Union launched a Fair Work Commission fight against the Commonwealth's return to office edict, after the bank told staff they would need to return to the office 50 per cent of the time from Monday.

The union noted more needed to be done to address NAB's "hours of work crisis" that was putting a strain on workers and said it would continue its Federal Court action to get recognition of the harmful work practices.

© AAP 2023

A new leader is expected to be installed at the Reserve Bank, marking the end of Philip Lowe's seven-year tenure in the top job.

Dr Lowe's term is due to end later in the year and federal treasurer Jim Chalmers has confirmed a decision will be made on the central bank's leadership this month.

Multiple media outlets reported on Friday that the governor would not continue in the top job, although the government remained tight-lipped on its decision.

Leaders would also not confirm if a decision would be made on Friday morning during a cabinet meeting, as was widely anticipated.

Deputy Prime Minister Richard Marles told Nine's Today program the government was still "going through our processes in relation to that position" when asked about the appointment.

Opposition Leader Peter Dutton does not want a senior bureaucrat in the role, with Treasury secretary Steven Kennedy and Finance secretary Jenny Wilkinson on the shortlist of likely candidates.

"You can't have somebody who is in the pocket of the treasurer or the finance minister," he said.

But Mr Marles said the Liberal leader was "playing politics" and any of the potential Reserve Bank governors would be independent.

"There are lots of people in government who work very closely with the government of the day," he said.

The Reserve Bank's deputy governor, Michele Bullock, is also considered as a leading contender.

Dr Lowe's term is due to expire in September.

The governor has faced criticism after embarking on an aggressive string of interest rate hikes after suggesting the cash rate would not move higher until 2024 .

© AAP 2023