He is leaving the club at the age of 72 and will hand over his position to CEO Mark Ashton.
The latter will continue in both his existing role and in the role that O’Leary currently occupies.
“I have thought very carefully about this for some time. I have consulted with Ed Schwartz, our major shareholder, and advised him that after three and a half years in post, I should like to step down and retire. There is no better time to do so than when the club is in such great shape,” O’Leary told the club site.
“As I approach my 72nd birthday, I know that this is the right decision. My family home is in Worcestershire, some 200 miles from Portman Road. The considerable travel involved in continuing to serve as Chairman has been taking its toll.
“Reaching the Premier League was always the dream when I became chairman in 2021, but I never dared to believe that it would happen so quickly. I have a strong sense of ‘mission accomplished’ as I prepare to say my farewells.”
He added: “Mike is, and will always continue to be, a long-term friend. He was instrumental in the acquisition of the club, and has been an amazing support to me over many years - in particular during the past three years at Ipswich Town Football Club. I’ll be forever grateful to him for that.”