International Cricket Council (ICC) chief executive Malcolm Speed announced in London on Friday that Hair offered to quit top level cricket in return for $500,000 after being lambasted for the Oval Test fiasco.
Hair's offer to leave the ICC Elite Panel of Umpires appears more likely to retain focus on the controversial umpire in a row which the ICC president Percy Sonn said had been marked by "entirely avoidable over-reactions".
Pakistan forfeited the Test on Sunday following their refusal to play after tea on day four in protest after Hair and fellow umpire Billy Doctrove penalised them five runs for alleged ball-tampering.
Pakistan were incensed with Hair and asked the ICC that the Australian should not officiate in their matches again.
Team captain Inzamam-ul-Haq faces charges of ball-tampering and of bringing the game into disrepute.
The ICC's executive board meets next Saturday to discuss Hair, although it is unclear whether there will be any decision before Inzamam's disciplinary hearing, now expected in mid-September.
The 53-year-old official has a history of conflict with Asian teams and was criticised in the sub-continent this week by both the Sri Lankan and Bangladesh boards.
Hair was slammed by Sri Lanka in 1995 after no-balling spinner Muttiah Muralitharan seven times in the Melbourne Test. Skipper Arjuna Ranatunga led his players off the field in protest before eventually returning.
The current crisis, with accusations of racial bias, is the biggest in the game since 2001 when the Indian board asked for match referee Mike Denness to be replaced for the third Test against South Africa after he had disciplined six Indian players, including Sachin Tendulkar, in the previous match.
Cricket-mad India erupted in street protests when Tendulkar was handed a suspended one-match ban for "cleaning the seam without the umpire's permission" and opening batsman Virender Sehwag banned for a Test for dissent.
The South African board acceded to India's demand to replace Denness and the ICC responded by declaring the match unofficial.
Sehwag sat out that match but the ICC ruled him ineligible for the subsequent first Test at home against England.
India's stance almost led to the England tour being scrapped before Sehwag was dropped for the first game on the ICC's assurance they would examine the decisions of Denness.
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