According to initial reports, the Australian coach has cited 'sporting bureaucracy' for his decision to quit the national team. His contract was to end on November 19, 2014.
"I hereby tender my resignation as the chief coach of the Indian men's hockey team as I am finding considerable difficulty adjusting to the decision making style of the sporting bureaucracy in India which I believe, in the long term, is not in the best interests of Indian hockey or its players," Walsh said in a letter to Sports Authority of India (SAI) director general Jiji Thomson.
The 60-year-old Walsh, represented Australia in two Olympics. He was appointed as India's chief coach last year. Also under him, India settled for silver at the Commonwealth Games 2014 in Glasgow. They lost 0-4 to Australia in the final.
According to "PTI", Walsh and some other support staff were having some issues with the government over TDS (Tax Deduction at Source) on their salaries.
Interestingly, Walsh also said that he would not like to continue with the top job on account of constant travelling with the team.
"In addition to my difficulties with not being able to professionally operate within these bureaucratic confines, I am not willing to continue with the constant time away from my family in Australia. My current commitment places too much stress on my personal life.
"Over the recent twelve month period I have become particularly attached to the playing group. In future years I would enjoy the prospect of retaining some involvement with the team and Indian Hockey," said the former Olympian who was part of Australia's silver winning team in 1976 Olympics.
Walsh thanked the SAI for giving him an opportunity to work as head coach of the team.
"May I thank you for the honour and opportunity to have worked with an Indian National Program for the last twelve months. I wish the Sports Authority of India every success as it builds into and beyond the 2016 Olympic Games," he said.
In an e-mail circulated to the media, Hockey India President Narinder Batra said that Walsh had issues with the SAI over his contract.
"Besides other issues he (Walsh) has issues with his contract with SAI, which now after his resignation expires on 19.11.2014," Batra said.
"We suggest if SAI can have a re-look at his contract before 19.11.2014 so that he may continue till Olympic 2016. We suggest for a meeting between SAI and Mr Walsh," he said.
Earlier this month (October 2), India, under his guidance, defeated Pakistan 4-2 in the final to win Asian Games 2014 gold medal and booked a direct entry to 2016 Olympics in Rio de Janeiro.
"The situation now is very delicately balanced. We have moved to a better place with the team than what we were a year back," the Australian had told PTI in an interview after the gold-medal winning effort.
"It was much-needed. The gold was a great tonic. But the real question from here on is sustainability and improvement. The need of the hour now is to make some aggressive strategy," he said.
"The present group of players are very good but the real issue is longevity. You need to have development programmes for sustainability and longevity. There needs to be accountability which I am sorry to say is not present now," he added.