Winters, 53, is one of the most respected bankers in the industry and has wide experience of investment banking and regulatory issues. Standard Chartered shares jumped 3 percent on the news of the appointment.
He will join the Standard Chartered board in May and take over from Sands the following month, and be based in London, where he has lived for the past 22 years.
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Winters joined JPMorgan in 1983 as a trainee in New York and moved up the ranks to become co-CEO of its investment bank from 2004 until 2009, when he left following a falling out with Chief Executive Jamie Dimon.
Winters then became one of five members of a British government commission that analyzed how banks could be made structurally safer. The panel's recommendations that firms should separate their domestic retail banking operations is being implemented.
"Bill is a globally respected banker and has the right experience and skills to drive the Group's new phase of growth," said Peace, who said he will remain in his role until next year to help Winters' transition.
Investors started calling for change at the top of Standard Chartered last year, citing strategic, governance and operational mistakes, and saying Sands had been slow to address problems and had not gone far enough in cutting costs.
Three of the bank's top 30 investors told Reuters in December that Sands should be replaced in 2015.
Former McKinsey consultant Sands, 53, steered Standard Chartered through the financial crisis, helping it to 10 years of record earnings. He has been CEO for eight years.
Some investors have urged Standard Chartered to make wider changes in the board, and the bank said on Thursday Jaspal Bindra, CEO of its Asia business, will also leave this year after 16 years with the bank.
It said a further three long standing directors will step down - Ruth Markland, Paul Skinner and Oliver Stocken - and said two new directors will join the board - Gay Huey Evans and Jasmine Whitbread.