Just nine months into the role and virtually a year to the day after he was appointed, Steele's ill-fated reign as chief executive came to an end in an episode that has shown the RFU in the worst possible light.
The former London Scottish player and coach paid the price for confusion over the job description for the performance director post that many hoped would be filled by former England coach Sir Clive Woodward, whose name is bound to be once again linked with a return to Twickenham.
An RFU statement read: "The RFU board of directors can confirm that John Steele has left the union with immediate effect. At the current time there is nothing more we can add while discussions are ongoing and we will update further as we are able." Steele's demise was sealed during Thursday night's emergency board meeting, which finished at 1am yesterday.
It was felt by both parties that he could no longer continue in his role and the RFU are currently meeting to agree the terms of his exit.
While Steele, the former UK Sport chief executive, has emerged as the fall guy, by their own admission the management board have hardly covered themselves in glory.
The board signed off three different versions of the performance director job description, dating back to January, but still claimed not to fully understand how the job would work.
"This has been a testing time for the RFU but the key to a strong organisation is how it responds in difficult times," said Thomas last month.
Steele's ambition when he took over was to give England the best possible chance of winning the 2015 World Cup on home soil and to ensure the nation hosts the best possible tournament.
But little over four years from the event, and just three months out from this year's World Cup, the RFU are searching for a new chief executive.
Steele had been fighting for his future at Twickenham ever since confusion arose over the performance director post that many felt was tailor-made for Woodward. Ten days ago, in response to fierce criticism of his handling of the appointment process, Steele sounded a note of defiance over his ability to continue.
"Yes, there has been this bump in the road but it doesn't mean that what we put in place in terms of our plans for the future isn't still as valid as it was six months ago," he said.
"I have been brought in to drive change, and that is exactly what I will do."On 25 May the management board gave him their "full support" and accepted their handling of the episode, which undermined Steele's position and left the union facing claims of amateurism, had "not shown the RFU in the best light".
The RFU changed the job description for the performance director role twice in the space of 48 hours. Woodward then ruled himself out of the running, opting to remain with the British Olympic Association.
At one stage, former RFU vice-chairman Fran Cotton openly called for Steele's head to sort out the mess, saying: "The only way it will be solved is by John Steele's removal. He has shown he is not up to the job. If it's a choice between John Steele as chief executive or Clive Woodward as performance director, it's a no-brainer."
Until the wrangling over the performance director's role began, Steele was seen to have been performing solidly and there is a groundswell of sympathy over the way he has been treated.
He spent the first six months of his reign conducting a review of the union and then instigated a management restructure that was well received. His desire to put rugby back at the heart of the union - he felt it had become too money-orientated - also hit the right note for many.
Baroness Sue Campbell, chair of UK Sport where Steele was chief executive for five years during which time he oversaw a huge increase in the funding of Olympic athletes, expressed her shock and sadness at his departure.
Campbell said: "I am shocked and upset to learn that John Steele has left the Rugby Football Union. As CEO at UK Sport for five years he was inspirational, highly professional and a huge success in driving change and leading people. British sport is incredibly fortunate to have a man with talent, principles and high integrity like John Steele and I am certain he will emerge from his RFU experience and continue to play a vital role in ensuring British sporting success well into the future."