Phil Knight, co-founder and chairman of Nike, will be stepping down from the world's largest sportswear firm in 2016.
Knight wants Mark Parker, who has been serving as the company's CEO since 2006, to succeed him.
Knight co-founded Nike in 1964 with Bill Bowerman, and he has been serving as chairman of the company since 2004. He owns a 16.26% stake in Nike. He will transfer most of the shares to a limited liability company named Swoosh.
Nike has named his son Travis Knight as the newest member of the company's board of directors.
"Nike has always been more than just a company -- it has been my life's passion," Knight, 77, said in a statement.
"Over the years, I've spent a great deal of time considering how I might someday evolve my ownership and leadership of Nike in a way that benefits all of our stakeholders. Today, we have taken a number of important steps that will continue to promote Nike's long-term growth."
"For myself, I intend to continue to work with Nike and look forward to contributing to its future well after my chairmanship ends."
Knight handed day-to-day management of Nike to Parker in 2004. Since Parker's appointment, the company's sales have doubled to $30bn (£19bn, €26.8bn) per year and its share prices have steadily increased, giving the firm a market capitalisation of more than $90bn.
"I believe Mark is the best choice to succeed me. He has been an outstanding CEO for the past nine years, and has demonstrated time and again his love for this company and his clear vision for capturing the tremendous potential Nike has to innovate, inspire, and drive growth," Knight said.
The company generates almost twice as much revenue as its main rival Adidas from Germany.