Catherine McGregor has apologised for saying David Morrison was a "weak and conventional choice" for 2016 Australian of the Year.
The Queensland finalist, who used to work for the former army chief, had said she felt really sad the board of the National Australia Day Council "did not have the courage to go with an LGBTI person".
"I thought it was time ... it was a weak and conventional choice," she told the Star Observer, a publication for the gay and lesbian community.
"I think I'll die without seeing a trans Australian of the Year and I think that's terribly sad," Ms McGregor said.
While Ms McGregor congratulated her former boss and friend on winning the top honour, she said he had a lot to learn about transgender issues.
The soon-to-be-retired Royal Australian Air Force group captain said Mr Morrison showed a "lack of skill" by referring to her by her former male name, Malcolm, in interviews after he won the award.
"He didn't do it intentionally ... but that showed a clunkiness he needs to learn," she said.
On Thursday afternoon, Ms McGregor published these tweets where she apologises "unconditionally" for her comments.
The National Australia Day Council has accepted the apology from Catherine McGregor.
In a statement, the National Australia Day Council Board said: "The board stands by its decision to select David Morrison as the 2016 Australian of the Year as a champion of diversity and for marginalised communities in Australia, including the LGBTI community."
