Jeff Bezos is the founder of Amazon
Mr Bezos will move to the role of executive chair of the company.
It comes as the company reported a surge in profit and revenue during the holiday season, with profits more than doubling to $7.2 billion and revenue jumping 44% to $125.6 billion.
The company said Andy Jassy, who heads Amazon Web Services, would take over as CEO in the third quarter.
Bezos, who has become the world’s richest person based on his stake in Amazon, said he will transition to the role of executive chair in the third quarter to hand over the CEO role to Mr Jassy.
“Amazon is what it is because of invention,” Mr Bezos said in a statement.
“Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”
Mr Jassy joined Amazon as a marketing manager in 1997 and in 2003 founded AWS, the web division of the company which has been one of the most profitable but least-known units of the tech colossus.