The group, vying for global dominance with Germany's Daimler and VW's truck brands, also released better than expected quarterly earnings two days ahead of schedule and said it would seek an external partner for parts of its IT business.
Persson had led a restructuring program aimed at cutting 10 billion Swedish crowns ($1.2 billion) in costs and boosting profitability to the level of more nimble rivals such as Scania.
But with less than a year to go to the deadline for the scheme and margins still below where they were before the plan was launched, pressure on Persson from top owners such as activist fund Cevian had been steadily building.
Chairman Carl-Henric Svanberg, who had appeared to give Persson a lease of life only weeks ago amid reports he was due to get the axe, said Scania boss Martin Lundstedt was being brought in to lead the next phase for Volvo.
"After three years of focus on product renewal, internal efficiency and restructuring, the Volvo Group is gradually entering a new phase with an intensified focus on growth and increased profitability," Svanberg said in a statement.
Even amid investor criticism, Persson delivered some of the strongest earnings of his tenure.
Sweden's biggest listed company by sales and top private sector employer said adjusted operating profit rose to 4.60 billion crowns from a year-ago 2.59 billion, topping a mean forecast of 3.47 billion in Reuters poll of analysts.