Vladimir Yakunin, the head of Russian state railways and an old friend of President Vladimir Putin, will leave his post to become a senator in a rare reshuffle among the Kremlin inner circle that controls large parts of the country's economy.
The move would be a significant demotion for Yakunin who has headed Russian Railways - a huge state corporation with more than $40 billion in annual sales - for 10 years and known Putin since they founded an elite housing cooperative together in St Petersburg in the 1990s.
It was not clear why Yakunin chose, apparently at short notice, to run for a largely ceremonial post as senator after heading one of the country's most important companies for a decade.
He will represent Russia's Kaliningrad region - an exclave sandwiched between Poland and Lithuania on the Baltic sea.
"Yakunin plans, after the conclusion of the elections, to join the Federation Council," said Russian Railways spokesman Grigory Levchenko. "The country's leadership made him this offer and he accepted."
A source close to Russian railways told Reuters Yakunin could become vice-speaker of the Federation Council, the upper house of parliament.
In the current composition of the Russian political system that job would be largely ceremonial although that could change given that Russia is gearing up for a new political cycle that would see parliamentary elections held next year and a presidential election in 2018.
The 67-year-old Yakunin signed a three-year contract to stay on at Russian Railways only last year and was reportedly on holiday when news of his resignation broke.