The Co-operative group said it has accepted Euan Sutherland's resignation as chief executive, and that chief financial officer Richard Pennycook will act as interim boss.
Sutherland's departure comes after he said efforts to overhaul the business became "impossible" because of the Co-op's failure to change its governance, the BBC reports.
He said in a statement that he resigned with "with great sadness", adding he will "not accept" retention and bonus payments previously agreed.
Co-op chairwoman Ursula Lidbetter said she accepted Sutherland's resignation with "deep regret".
She added: "Euan's resignation must now act as a catalyst for the real and necessary change which the group must go through."
In his resignation letter Sutherland said the governance structure of Co-op limited the reforms he wanted to implement.
"Until the group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future."
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