Yasuhisa Arai will leave his role as motorsport boss for Honda's Formula 1 programme at the end of the month.
Following a board meeting in Tokyo, Honda Motor Company Ltd has announced its "annual organisational changes".
Yusuke Hasegawa, who joined the division in 1986, will replace Arai as head of development, manufacturing and management of the F1 project with Arai moving into the role of senior managing officer of Honda R&D.
Hasegawa was previously managing officer and director of Honda R&D and chief operating officer of the advanced research division.
CEO of Honda R&D Yoshiyuki Matsumoto will oversee the overall running of the project.
Arai faced growing pressure over the course of last season as Honda struggled for reliability and performance on its return to F1 with McLaren.
The alliance finished a disappointing ninth in the constructors' championship, ahead of only Manor, with Alonso getting through 12 power units across the season.
Arai, who has led the project since Honda's return, retained his role through the winter, with the Japanese manufacturer sticking with its philosophy for 2016 but changing the turbine, compressor and MGU-H.
Speaking late last year to Autosport, he said he believed the deployment deficit to the top teams will be "non-existent" this year.
"It's quite a different situation - 2015 and 2016," Arai added.
"We didn't have any experience with the complex system, so you can imagine the challenge, but we learned a lot and we have the confidence we can catch up."
Ben Anderson, Grand prix editor
Given how badly the Honda engine has underperformed since it returned to Formula 1 in 2015, it was probably only a matter of time before major changes were made.
Honda was always going to get a period of grace to find its feet, given the late start it had on producing V6 hybrid turbo engines compared to rival F1 manufacturers, but even so results and progress has been disappointing.
Although the lack of results was embarrassing (and costly) for McLaren-Honda, it was the pace of recovery that really caused tensions to rise within the reformed alliance.
Not only was Honda off the pace on track, it was also failing to react fast enough to the various performance and reliability problems it encountered along the way.
That could be forgiven initially, while Honda found its feet, but it has persisted throughout the first 12 months of its F1 return, and has stymied McLaren's plans to get back to winning ways.
Yasuhisa Arai has maintained a positive outlook throughout his time in the paddock, and has taken heavy criticism of his work on the chin, but he perhaps underestimated the scale of the challenge Honda faced upon returning to F1, and how ruthlessly efficient you need to be in order to succeed.
Arai is a loyal Honda lifer, so it's not surprising to learn he's been moved into a different role within the broader company, rather than booted out altogether.
But Honda has clearly recognised the need for change at the top of its F1 programme, and Arai has finally paid the price.