The state-backed British bank said that Sir Winfried Bischoff would step down no later than the shareholders meeting in May next year and that the exact date would be subject to the appointment of his successor.
Anthony Watson, senior independent director, will lead the search for his replacement.
“Lloyds Banking Group has, over the past four years, made significant progress in its goal to become a strong, efficient, UK-focussed retail and commercial bank,” said Bischoff.
“Whilst clearly some challenges remain, the performance of the group is well on track. Indeed, in many areas, it is ahead of plan. This gives me every confidence in the future success of the group and it is therefore a good time to start the search for my successor.”