Cisco Systems said Chief Executive John Chambers would step down in July after 20 years at the helm, to be replaced by company veteran Chuck Robbins.
Chambers, one of the longest-serving CEOs of a Silicon Valley company, will become the network equipment maker's executive chairman and continue to be chairman, the company said on Monday.
Cisco's shares were up 0.5 percent at $29.16 in early trading. (Get the latest quote here.)
Cisco has been looking for a new CEO for the past 16 months, board member Roderick McGeary wrote in a blog post detailing the entire hiring process.
Chambers is the second high-profile U.S. technology executive to step aside from the top job in the past eight months. Oracle CEO Larry Ellison announced his plan to become executive chairman in September.
Analysts and investors had long expected an announcement that 65-year-old Chambers would hand over the reins to a younger leader.
But the choice of a relatively unknown executive was a surprise.
"The fact that you've got a transition is not a surprise, and if anything, is a positive," JMP Securities analyst Erik Suppiger told Reuters.
"But the fact that they selected a candidate that wasn't the expected candidate might cause some marginal concern for
Rob Lloyd, Cisco's director development and sales, was "more visible" to investors, Suppiger said.
Robbins has been Cisco's senior vice president of worldwide operations, leading the company's global sales and partner team.
He joined Cisco in 1997 and became a board member on May 1.
Chambers has grown the network equipment maker's sales to about $48 billion from $1.2 billion since he took the top job in 1995. He will now work with customers and governments around the world and focus on leading Cisco's role in country digitization.
Cisco reported stronger-than-expected revenue and profit in its second quarter ended Jan. 24 as demand for switching equipment and routers helped make up for weak spending by the company's traditional telecom customers.
Up to Friday's close, the company's shares had risen 4.7 percent since the start of the year.