The move was announced as the Bradford-based chain reported that like-for-like sales fell 3.1 per cent in the six weeks to January 4.
Andrew Higginson, who is due to become chairman later this month, said the company’s board believed the push to return the business to growth was “best done under new leadership”.
Mr Higginson said it was “time for a fresh pair of eyes” over the business, although he pointed out that the company’s Christmas performance was not a factor in the decision to change leadership.
Mr Philips said: “I’m very sad to be leaving but when a board wants to make a change you accept that and move on.”
Morrisons also announced it is planning to close 10 loss-making smaller stores, putting more than 400 jobs at risk.