Ian Livingston is to succeed Ben Verwaayen as BT chief executive.
Livingston, who is currently chief executive of BT Retail, is to succeed Verwaayen as chief executive of BT Group on 1 June.
Verwaayen will step down as CEO on 31 May, and will leave the board on 30 June. He has not said what he will be doing next.
Verwaayen's departure had been widely expected after the group's faltering financial performance. He joined BT six years ago from Lucent, which later merged with Alcatel.
BT chairman, Mike Rake, said, "Ben has been an exceptional CEO whose courage and leadership has transformed BT from being a deeply troubled organisation into a thriving business with global capability and a clear strategy for the future.
"The board has been involved in the process of transition for many months to ensure an orderly succession. Ben has been instrumental in restoring pride in BT. Everyone in the company owes him a huge debt of gratitude and wishes him well for the future."
Verwaayen recently received an honorary knighthood in the UK for his contribution to the communications industry.
He said, "I have had six exciting years and I am extremely proud of the people in BT. Without them, the company's recent success would not have been possible.
"Ian Livingston will lead the company from strength to strength when he takes over as CEO in June. He is a great guy with a fantastic record of business achievement."
Livingston joined BT as group finance director in 2002. He took over as chief executive of BT Retail in 2005. He was previously at Dixons. Livingston was previously tipped as the favourite to succeed Verwaayen.
Livingston's current role will be filled by Gavin Patterson, currently group managing director of BT's consumer division. He will become CEO of BT Retail joining the BT board on 1 June.