The shock move is the latest drama to rock TV3's news and current affairs department in the last 18 months. It is understood Barry's departure has caused turmoil at the broadcaster, which has merged its television and radio newsrooms.
Ms Barry is a lynchpin at both ends of the day for the company. She co-stars on the Paul Henry breakfast TV and radio programme and is an anchor on the 6pm news.
She is immensely popular among MediaWorks staff and the public, and her colleagues are said to be devastated she is leaving.
Paul Henry, when asked for comment last night, appeared to be momentarily speechless.
After a palpable pause he eventually said: "Er ... I don't have any comment to make. Thank you and good evening."
Ms Barry, 46, has not been on air for some days. Her replacement evening newsreader Melissa Davies tweeted on Thursday: "Both Hilary and Mike [McRoberts] are sick. Wish them well." She went on to say she hoped she wouldn't catch "whatever's around the studio".
Sources told the Weekend Herald there had been some internal debate about how her departure should be managed, particularly given a major announcement on the company's future had been scheduled for Tuesday.
It is understood MediaWorks boss Mark Weldon is overseas on business and wanted to be back before the news was made public. However, staff began to learn of Barry's departure yesterday.
Mr Weldon confirmed Barry's departure last night.
"After a distinguished career with MediaWorks spanning 23 years, Newshub at 6pm and Paul Henry Presenter Hilary Barry has decided to leave the company.
"On behalf of MediaWorks, I want to thank and pay tribute to Hilary. She is a brilliant broadcaster, highly respected journalist and much-loved personality, who will be missed by myself, colleagues and audiences."
Mr Weldon said Barry started with TV3 as a news reporter in Christchurch in 1993 and had become one of New Zealand's favourite personalities on television and radio.
"This was a personal decision made by Hilary. We are disappointed to lose her but also acknowledge that, after 23 years, it's very reasonable she might wish to make a change.
"So, we respect her decision, thank her for her enormous contribution, and wish her the very best."
Weldon has cut a controversial figure since joining MediaWorks as chief executive in August 2014.
The former Olympic swimmer and NZX chief executive turned wine-maker has been under scrutiny amidst concern over ratings at TV3.
Under his stewardship MediaWorks ditched Campbell Live last year sparking a heavy public backlash. That was followed by the decision to axe another current affairs programme 3D, hosted by Samantha Hayes. In the aftermath journalists including Paula Penfold - who is married to Barry's 6pm co-host Mike McRoberts - also left.
Richard Sutherland, Acting Chief News Officer said: "Hilary has covered every major story that has touched the lives of New Zealanders, from the Christchurch earthquakes to Pike River, the Royal Wedding, the America's Cup, and the death of Nelson Mandela.
"She is a world class broadcaster and a consummate professional. After 23 years she has decided it's time for a new chapter in her life."
It is understood Barry has been dissatisfied with the network's direction for some time.
One source told the Weekend Herald that if Barry did join arch-enemy TVNZ, where she is believed to be in talks, it would be a "double whammy" for rival TV3. It is not known what role she could take up at TVNZ, but one source said Barry only had to serve a month's notice at TV3.
TVNZ spokeswoman Georgie Hills said she would not comment on whether Barry would join the state broadcaster.
"We don't comment on the individual employment situation of our own staff let alone anyone else's."
Barry presented 3 News on weekends for six years, before fronting the flagship weeknight news programme.
She recently celebrated her 11th TV3 news anniversary alongside NewsHub co-presenter Mike McRoberts.
Last year she also became news anchor for the morning Paul Henry Show.
She and husband Mike Barry, a teacher and son of All Black Kevin Barry, have two sons, Finn and Ned.
In February Barry made the news herself when she laughed uncontrollably while delivering a report on the morning programme after reading an item about a former Malaysian diplomat who admitted going to a young woman's home with no pants on and defecating on her step before leaving.
MediaWorks owner, vulture fund Oaktree Capital, has been taking a closer interest in its New Zealand broadcaster recently. Earlier this month it appointed one of its bankers to the board, and it passed a new constitution which sets a $2 million annual limit on any new investments, liabilities or litigation by Weldon and his team that has not been approved by directors.
On Facebook, Barry's Newshub co-anchor Mike McRoberts wrote it had been an honour working with her over the past 11 years.
"Presenting the news to the nation each night is a job I've always described as an honour and privilege. And such a big part of that for the past 11 years has been about the person sitting next to me.
"Hilary is the most genuine person I know. I don't think it's a stretch to say she's changed the media landscape in this country - by making it a little more real," he wrote.
"As her workmate I'll miss her terribly, but as her friend I'm thrilled she's leaving on her own terms and I'm excited for her future."
Former TVNZ head of news and current affairs Bill Ralston said losing Barry was a huge blow for Mediaworks and her morning co-host Paul Henry.
"She's the old TV3 and they want a new TV3 ... She's an old, loyal TV3 person and the new TV3 is not a place for her, and it's a real blow to Paul Henry. She was such a foil to him - they worked so well together. It's a real bloody shame."
Ralston said he didn't know where she was going, but she deserved "a big cup of tea and a lie down".
Celebrities have taken to social media following news of Barry's resignation.
"Simply the best," posted Story co-host Duncan Garner.
"I'm going wherever @Hilary_Barry is going! Woo woo woo woo," wrote musician Anika Moa.
And comedian Guy Williams posted: "Really gonna miss @Hilary_Barry good luck for the future eh!"
