Hewlett-Packard will be firing CEO Leo Apotheker and replacing him with Meg Whitman, the company announced Thursday afternoon.

I am honored and excited to lead HP, Whitman said in the release. I believe HP matters-it matters to Silicon Valley, California, the country and the world.

In addition, Ray Lane, who currently serves as nonexecutive chairman, will move to the position of executive chairman, allowing him to have a full time roll in the company.  He currently serves as Managing Partner of Kleiner Perkins Caufield & Byers, a private equity firm.

We are fortunate to have someone of Meg Whitman's caliber and experience step up to lead HP, Lane said in the statement. We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead.

Whitman, 55 years old, will replace CEO Leo Apotheker, who came in less than a year ago after the high profile firing on then CEO Mark Hurd after a sexual harassment probe. Although the board did not substantiate claims of harassment, he was let go after violating company policy in terms of expense accounts.

Under Apotheker's leadership, the stock price dropped around 40 percent.  Although the board publicly backed the CEOs plans to sell off the PC unit, many on Wall Street gave the idea a chilly reception.

Despite the change, Lane thanked Apotheker for his service to the company.

We very much appreciate Léo's efforts and his service to HP since his appointment last year, Lane said.  The board believes that the job the HP CEO now requires additional attributes to successfully execute on the company's strategy. Meg Whitman has the right operational and of communication skills and leadership abilities to deliver improved execution and financial performance.

Whitman was formerly the CEO of online auction site eBay from 1998-2008, where she turned the small company into a multinational Internet giant.  Before eBay, she held leadership positions at Bain & Company, Disney and Hasbro.

The executive recently made an endeavor into politics, running on the Republican ticket to replace Arnold Schwarzenegger as California governor in 2010. Despite pouring nearly $150 million of her own wealth into the race, she lost to Democratic challenger Jerry Brown.  While initially running neck and neck with the governor, she dropped in the polls during the final stage of the campaign, and was accused by some foes of trying to buy the election.  

After the election, Whitman was named to the board of directors for Hewlett-Packard, serving as an independent director.  She has also served on the boards of Procter & Gamble and Dreamworks Animation.  

Although initially the plan was to have Whitman serve as CEO on an interim basis, All Things Digital reports that she plans to serve as a permanent replacement.

Hewlett-Packard is one of the largest information technology companies in the world, with over 300,000 employees and $126 billion in revenue for 2010, making it the largest company based in California by revenue. Although the stock soared yesterday, it fell today 4.92 percentage to $22.80 a share by market close.