Milligan, who joined Sky from five in 2004, is believed to be negotiating the terms of his departure with Sky; it is uncertain when he will be leaving.
Industry speculation suggests that Milligan will join his former boss, Dawn Airey, at the media start-up Iostar. Airey quit as Sky's managing director of channels and services late last year, to take on the chief executive role.
Milligan first worked with Airey at five, where he was her deputy chief executive, before joining her at Sky.
Milligan will most likely be succeeded by the deputy managing director, Paul Curtis. He also worked at five with Milligan, before moving to Viacom Brand Solutions as the managing director. He joined Milligan at Sky in 2004.
Sky Media denied Milligan was leaving. "Nick Milligan has not resigned and remains the managing director of Sky Media," a spokesman said.
The news comes at a time when BSkyB is in the middle of content negotiations with Virgin Media, including talks to renew the deal to supply Sky One to the cable operator.The negotiations became heated this week when Sky launched TV ads telling viewers that Sky channels could be withdrawn from Virgin Media if it did not pay a "fair price" for them. It urged customers to lobby Virgin about this.