Chief Executive Officer Gavin Patterson, who will leave the company later this year after nearly five years in charge, couldn't reverse a share price slide that started about 2 1/2 years ago.
BT shares plummeted after it was announced, and are now trading near a six-year low.
"The broader reaction to our recent results announcement has. demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy", he said.
"While the markets are likely to receive the news positively (.) it does beg the question as to why the transition was announced after the company launched a fundamental transformation programme flanked by a reorganization of the management structure with new appointees", they said.
Mr Patterson has been at BT for 14 years, 10 of those as a board member.
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A former holder of Computer Weekly's Most Influential Person in UK IT title, Patterson has been with BT for nearly 15 years - 10 of them as a board member. It would cost £800 million ($1.1 billion) to implement. He had missed out on a bonus in the previous year after a number of setbacks. He was appointed chief executive of the BT Group in 2013.
He will continue in his role until the new boss is named.
The company's last financials saw a three per cent drop in fourth-quarter revenue to £5.967 billion with core earnings rising one per cent to £2.083 billion.
When you devise a strategy which has the "full support" of the board then you expect that you will be around to execute it. Gavin Patterson's departure is unusual in the sense that the board liked his plan, but didn't think he was the person to carry it out.
But the subsequent decline in the share price showed investors were not on side.
Laith Khalaf, a senior analyst at financial services firm Hargreaves Lansdown, said: "Since 2016, BT's share price graph resembles something of a black run; pretty much always on a downward trend and with a few nasty cliffs.Ultimately, this is what's behind the change".