Steve Ballmer will retire from his position as Microsoft CEO within the next year, the company revealed this morning.

The move is part of a wider restructuring which aims to transform Microsoft into a "devices and services" company. A planned management shuffle was rumoured to be one reason for the departure of Xbox head Don Mattrick last month.

Ballmer will remain CEO while a successor is chosen. He will oversee the succession process, together with a special committee appointed by the Microsoft board, which includes chairman and founder Bill Gates.

"There is never a perfect time for this type of transition, but now is the right time," commented Ballmer. "We have embarked on a new strategy with a new organization and we have an amazing senior leadership team. My original thoughts on timing would have had my retirement happen in the middle of our company's transformation to a devices and services company. We need a CEO who will be here longer term for this new direction."

Board member John Thompson, who will chair the succession committee, added: "The board is committed to the effective transformation of Microsoft to a successful devices and services company. As this work continues, we are focused on selecting a new CEO to work with the company's senior leadership team to chart the company's course and execute on it in a highly competitive industry."

Microsoft will be looking for candidates both internally and externally.

Ballmer, 57, took over from Gates as CEO in January 2000. During his tenure the company's annual revenue increased from $25 billion to $70 billion, but in recent years Ballmer has attracted criticism for his alleged failure to capitalise on changes in the computing market.

In May 2012, Forbes columnist Adam Hartung described Ballmer as "the worst CEO of a large publicly traded American company", saying he had "steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets)."

Microsoft stock has risen more than 7% since the announcement of Ballmer's departure.