Google Inc co-founder Larry Page will replace Eric Schmidt in April as chief executive of the world's No. 1 search engine, the company said on Thursday.
Shares of Google rose about 2 percent to $639 in extended trading.
The company, which also reported better-than-expected net revenue for its fourth quarter, said the management change was made as part of a plan to streamline decision making and create clearer lines of responsibility and accountability at the top of the company.
Schmidt, who became CEO in 2001, will assume the role of executive chairman, focusing on deals and government outreach, among other things.
Page, who co-founded Google with Sergey Brin, will take charge of day-to-day operations as CEO.
Google also reported fourth-quarter financial results, beating Wall Street's net revenue expectations.
Net revenue, excluding fees that Google paid to partner websites, was $6.37 billion. Analysts polled by Thomson Reuters I/B/E/S, on average, were expecting net revenue of $6.06 billion.
(Editing by Anshuman Daga, Tim Dobbyn and Richard Chang)