EBay Chief Executive Meg Whitman, who has run the online auction giant for 10 years, will step down from the CEO role at the end of March, the company confirmed.
Whitman will be replaced by John Donahoe, who currently runs eBay's Marketplace Division. Donahoe joined the company in early 2005.
Shares of eBay leaped late in trading Wednesday after CNBC reported the changes prior to eBay's announcement, which came after markets closed.
Whitman will remain on the eBay board of directors. She is currently the company's third-largest shareholder.
Rajiv Dutta, who runs its PayPal division, will replace Donahoe as president of Marketplace, which is the company's core auction business. Dutta also will join the board.
Whitman's departure comes at a time when one of the best-known companies on the Internet is trying to recapture the runaway growth that made it into a household name.
But Whitman, 51, is also following her own advice that no CEO should stay more than a decade in the job, a philosophy that reflects the unassuming character which made her popular among the sellers who use eBay's auction site.
Under Whitman's leadership, eBay has turned into one of the most-visited sites on the Internet. (See interview of Whitman and Donahoe discussing succession plans at left.)
But the company's growth has weakened in recent years. A slower core auctions business, rising competition from online retailers and missteps with the acquisition of online communications company Skype have cut the stock price nearly in half compared from its peak three years ago.
Last October it announced a $1.4 billion write-down of its investment in Skype.
Prior to joining eBay, Donahoe was the worldwide managing director of Bain & Co., where he oversaw the consulting firm's 29 offices and 3,000 employees.
He also previously held jobs at corporate phone equipment maker Rolm and at Salomon Brothers, now a unit of Citi.
He took an undergraduate degree from Dartmouth University and a business degree from the Stanford Graduate School of Business.
-- Reuters contributed to this report.