Sandy Leitch, who is also chairman of Bupa and Intrinsic Financial Services, is to retire at the end of the year, due to other business commitments.
Win Bischoff, chairman of Lloyds, said: “The board and I have accepted with reluctance Sandy Leitch’s wish to retire from the board after more than six years but respect his commitment to his other roles and the consequent demands on his time.
“He has been an outstanding colleague with a well developed commercial sense and a deep interest in our people.”
The former Zurich Financial Services chief executive will continue as an adviser to the board in 2012 for its insurance and Scottish activities.
The outgoing Scottish Widows chairman says the bank has “turned a corner” with “real progress” being made.
He adds: “I am sorry to leave but pleased to be continuing my relationship with the group in an advisory capacity for 2012.”
Glen Morenio, senior independent director, will become deputy chairman from next year.
Further changes to the board were also announced as it emerged group finance director Tim Tookey is to join Friends Life as chief financial officer.
Tookey, who became group finance director and a board director in 2008, is to leave Lloyds in February 2012. The bank have begun a search for another group finance director.
Tookey says: “This has been an important period for the group and I am pleased to have played a part in defining the next stage of the strategy which I fully endorse as the right one to realise the group’s potential.
He adds: “With its implementation now underway, this felt like the right time to consider a different challenge.”