Microsoft has named Indian-born Satya Nadella as its new chief executive and announced that founder Bill Gates is stepping down as company chairman.
The appointment of the 46-year-old computer science expert, who has worked for the technology giant for 22 years, confirms widespread speculation.
Mr Nadella said a key part of his job would be to speed up the delivery of new products to customers.
A married father-of-three and cricket fan, he takes control with immediate effect from Steve Ballmer, who announced last August that he was to step down.
Meanwhile, Mr Gates will assume a new role on the board as founder and technology adviser, devoting more time to the company and supporting the new boss "in shaping technology and product direction", Microsoft said.
Mr Nadella said: "Microsoft is one of those rare companies to have truly revolutionised the world through technology, and I couldn't be more honoured to have been chosen to lead the company.
"The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform.
Mr Nadella had until now been in charge of the company's cloud and enterprise division.
Microsoft said that since joining in 1992 he had "spearheaded major strategy and technical shifts across the company's portfolio of products and services".
Mr Ballmer, who took over as boss from Mr Gates in 2000, said: "Having worked with him for more than 20 years, I know that Satya is the right leader at the right time for Microsoft."
The appointment ends speculation over the role that had seen Ford boss Alan Mulally touted as a candidate before he quashed the rumours.
It is thought likely to disappoint Wall Street investors keen on seeing an outsider brought in to institute a shake-up following Mr Ballmer's departure.
But the move should be welcomed by rank-and-file staff at a business where he is seen as popular and consensus-driven.
Born in 1967 in Hyderabad, Mr Nadella started his career at Sun Microsystems before joining Microsoft in 1992. He describes his hobbies as cricket and poetry.
Analysts hope that he can maintain the company's momentum in the rapidly expanding field of cloud computing, at a time of turmoil for the company.
Founded in 1975 by Mr Gates and Paul Allen, it enjoyed great success with its Windows and Office software but has been late adapting to developments elsewhere in the technology industry.
Google has become dominant in online search while iPhones, iPads and Android devices have hit the company's strength in the personal computer market.
Its attempts to manufacture its own devices have run into problems, with its Surface tablets yet to turn a profit.
Microsoft's cloud computing offering, Azure, and its push to sell Office software as part of an annual subscription package are seen as the biggest drivers of growth in the next couple of years.