Sports Direct said its chairman Keith Hellawell would step down at its annual meeting today.
The move heads off a potential revolt from independent shareholders over corporate governance at the firm majority owned by founder Mike Ashley.
Hellawell, a 76-year-old former police chief constable and government drugs czar, has battled to keep his job at the sportswear retailer in the face of criticism of its working practices and his own ability to control Ashley.
He narrowly won re-election a year ago after independent shareholders defeated him in two previous votes when Ashley used his 61% holding to ensure his survival.
Three shareholder advisory groups - Pensions & Investment Research Consultants (Pirc), Institutional Shareholder Services and Glass Lewis & Co - had urged investors to vote against the re-election of Ashley and Hellawell.
The groups said their concerns about corporate governance had not been resolved.
Conditions at the retailer came under fire in a report by British lawmakers in 2016, which highlighted "appalling working practices at both the Sports Direct shops and warehouses".
Concerns were also raised over the role of Michael Murray, the partner of Ashley's daughter, who provides property consultancy services to Sports Direct and holds the title "head of elevation".
Hellawell, however, said he was stepping down after overseeing significant improvements in the working practices and corporate governance of the company.
"I have every confidence that the group will continue to go from strength to strength," he said.
He said he had enjoyed the challenges of Sports Direct and the support of Mike Ashley, many major investors and members of the board and senior staff.
Hellawell will be replaced by non-executive David Daly, Sports Direct said.
The British retailer had said earlier today that its trading was in line with previous guidance.
The firm has forecast a 5-15% improvement in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the current financial year.
This excludes the acquisition of House of Fraser, which it purchased out of administration for £90m last month.
