Sainsbury's boss Justin King is to step down in July after 10 years as chief executive of the supermarket.
The move, which ends months of speculation about his departure, will see commercial director Mike Coupe take over at the helm of the group.
Mr King has been credited with reviving the fortunes of the supermarket and more recently helping it fight off growing pressure on the sector from discount retailers.
Chairman David Tyler said: "Justin is a truly exceptional leader who has reshaped Sainsbury's during his 10 years as CEO, as well as playing a leading role in the sector and wider business world.
"He leaves a lasting legacy with the company stronger than ever."
Mr Tyler said Mr King's successor was a man of "unique talent and experience".
"He has worked hand-in-hand with Justin over the past decade and has a proven track record of success, making him the natural choice to take the company forward."
Mr King, who will stand down at the annual general meeting on July 9, said: "This was not an easy decision for me to make, and in truth it will never feel like the right time to leave a company like Sainsbury's.
"It has been a privilege to have led the company for the past 10 years and I am incredibly proud of our achievements in that time. I am confident that under Mike's leadership the business will go from strength to strength."
Mr Coupe said: "It's an absolute honour to be appointed as the new CEO of Sainsbury's in this, the company's 145th year, at a time when thanks to Justin's leadership, we have been consistently outperforming the market."
Shares were down 2% on the announcement.
Mr King has waived his entitlement to a cash severance payment of up to £1.7 million on departure.
It comes three weeks after the supermarket defied expectations to post a 36th successive quarter of growth in the 14 weeks to January 4.
However the quarterly growth was just 0.2% and the supermarket was forced to admit that full-year growth would come in below a previously expected 1%-1.5% range, prompting analysts to shave annual profit forecasts.
In today's announcement, the supermarket said Mr King would receive no annual bonus for the 2014/15 financial year, or any bonuses under a deferred share scheme or long-term incentive plan for the period.
But he will still be in line to receive a bonus and deferred share award for the current financial year and will also receive long-term awards for previous years' performance.
Mr Coupe will be paid a salary of £900,000 but the company said bonuses will be rebalanced towards a long-term scheme.