Google co-founder Larry Page is to take the reigns of the company and replace Eric Schmidt as CEO this April.
Mr Schmidt was brought in to help Mr Page and his partner Sergey Brin in 2001, to provide "adult supervision" to the two students.
"I am enormously proud of my last decade as CEO and I am certain that the next 10 years under Larry will be even better! Larry, in my clear opinion, is ready to lead," said Mr Schmidt.
The company has been operating in a triumvirate management structure between them for the last decade, but now Mr Schmidt will move to executive chairman, working on deals, partnerships and government outreach, and advisor.
On a conference with analysts late last night Mr Schmidt said: "I believe Larry is ready. His ideas are very interesting and clever and it's time for him to have a shot at running this."
He has more than 30 years experience in the industry and was previously chief technology officer at Sun Microsystems and the head of Novell Inc, before becoming the Google chief executive in 2001.
The management changes came as Google announced a 22pc increase in pre-tax profits in the three months to the end of December to $3.1bn on revenue up 26pc to $8.4bn. Full-year pre-tax profits rose to $10.8bn from $8.4bn.
Google highlighted the UK as its weakest market, with revenue up 13.7pc to $878m.