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Rolls-Royce, the Derby-based power systems giant, has revealed that Sir John Rose will retire from the company at the end of March 2011.

He will be succeeded by John Rishton, currently chief executive of the Dutch retail group Royal Ahold. Rishton has been a non-executive director of Rolls-Royce since 2007 and chairs the Audit Committee.

Sir John has been chief executive since 1996, having joined the company in 1984.

Sir Simon Robertson, chairman of Rolls-Royce, said of him: “John has led a transformation in Rolls-Royce which has few parallels. As he would be the first to point out this has been a team effort, but it has been his leadership, strategic vision and tenacity which has made this extraordinary achievement possible.

"With John at the helm, the group has developed into a truly global company, it has built a powerful portfolio, and constructed a platform from which we expect revenues to double in the decade ahead. This presents a tremendous opportunity which I know John Rishton and the rest of the management team will take forward.

“Since joining the board John Rishton has gained a deep understanding of Rolls-Royce and established an excellent relationship with the management team. He has a proven track record as a chief executive of a global company and has a background in aerospace and manufacturing. He was the unanimous choice of the board and I am certain will do an outstanding job at Rolls-Royce.”

Sir John joined Rolls-Royce in 1984, and became a Board member in 1993 before being appointed chief executive. He said: “It has been my great good fortune to work for Rolls-Royce for the past 26 years, and to have been its chief executive for nearly 15. The success of Rolls-Royce is founded on teamwork and technology.

"The people in this extraordinary company have my deepest admiration and it has been a tremendous privilege to work with them. Rolls-Royce has earned the opportunity to grow and to prosper in the coming years. John Rishton is an excellent choice, and I wish him and all my many other friends and colleagues in the company well.”

Before joining Royal Ahold in 2006, Rishton was chief financial officer of British Airways for four years. He has also held senior positions at the Ford Motor Company. He said: "Rolls-Royce is an outstanding company which I have come to know well since joining the Board. It has a tremendously strong executive team which has been led with distinction by John Rose.

"I feel extremely proud and excited by the opportunity to take the strategy forward and to lead Rolls-Royce into its next phase of development.”

Ian Strachan, who is a non executive director of Rolls-Royce, will replace John Rishton as chairman of the Audit Committee on an interim basis.

Business secretary Vince Cable also paid tribute to Sir John: "Sir John Rose has been a tremendous business leader for Rolls-Royce, driving it to world leading positions in the civil aerospace, defence, marine and energy markets. As a champion of UK advanced manufacturing I want to thank him for the huge contribution he’s made to strategic thinking both within business and government on growing global market share.

"I am sure that John, whatever he chooses to do in the future, will continue to make an important contribution to the UK's success."