Audi will replace CEO Markus Duesmann with Volkswagen Group strategy chief Gernot Doellner.
Doellner will take over from Duesmann on Sept. 1, Audi said in a statement on Thursday.
Duesman's future had been in doubt following a number of mishaps and slow progress on innovation that has seen the luxury brand fall behind competitors BMW and Mercedes-Benz.
Audi is seeking to catch up with rivals in the dash towards electrification, including in China, the world's top car market.
Earlier this month VW Group CEO Oliver Blume singled out Audi’s slow progress on innovation as a key area of concern.