Marks & Spencer boss Sir Stuart Rose has committed to stay with the retail giant until July 2011.
Sir Stuart pledged to remain with the group as he announced a sweeping management overhaul, which will see him move up from chief executive to become executive chairman.
Lord Burns will stand down from his position as non-executive chairman amid the boardroom reshuffle, which will also see director of retail Guy Farrant leave after 30 years at the firm.
Sir Stuart, 58, will retire once he has completed his three-year spell as executive chairman, which is due to start in June.
M&S has recently been subject to speculation that Sir Stuart could be about to quit the group. He originally said on joining Marks & Spencer in 2004 that he would only stay with the firm for three years.
But his new role is likely to raise eyebrows in the City, with best practice guidelines on corporate governance recommending that a company should avoid promoting a chief executive to the role of chairman.
However, M&S said it believed Sir Stuart's appointment was "in the best interests of M&S", adding that it had also consulted with major shareholders.
The group declined to comment on how much he would be paid in his new role, ahead of details due to be revealed in the company's annual report in June.
Sir Stuart earned £7.8 million in salary and bonuses in 2006/07.
Lord Burns, who will leave M&S after more than two-and-a-half years, said Sir Stuart's new position would allow him to focus on finding a successor. He said: "It is my view, and the unanimous view of the independent directors, that placing Stuart in this new role creates the right leadership structure for the company."
