The resignation brings to an end a two-year battle for control of the company, after two Chinese groups - Shougang and APAC Resources - acquired a combined 40 per cent shareholding.
They had also disputed Mr Hill's insistence that he was an independent director.
The controversy also led to the resignation of another former chairman, Neil Hamilton, prior to last year's annual meeting.
The Foreign Investment Review Board wrote to the company earlier this year expressing concern that Mt Gibson did not have a majority of independent directors; this was one of the conditions attached to FIRB approval of the Shougang and APAC transactions.
Mr Hill has maintained that the board is working to have a majority of independent directors.
Mt Gibson announced last week that Mr Tonkin would be leaving immediateloy, rather than serving a six-month transition period as previously announced.