Nick Read, finance director since 2014, will replace him.
The announcement came as Vodafone reported a €2.8 billion profit for the financial year, a substantial increase from the €6 billion it lost last year due a write down in the value of its Indian network.
"At the date of the Group's Annual General Meeting on 27 July 2018, Deputy CFO Margherita Della Valle will succeed Nick Read as Group Chief Financial Officer and will join the Board, and Nick Read will become Group Chief Executive-Designate", it said.More news: Off-duty policewoman shoots armed robber attacking group of moms
Colao has been at the helm since 2008, with Vodafone saying he had overseen the company's shift, assuming "a diverse portfolio including the largest mobile and fixed next-generation network in Europe".
After 10 years of stability under Colao, Vodafone is potentially setting sail into uncharted waters under the guidance of an executive that has been with the company only 4 years and has less top level experience than the markets would have been fully comfortable with.
Vodafone Group Chairman Gerard Kleisterlee said: "On behalf of the Board, I would like to express our gratitude to Vittorio for an outstanding tenure".
"While the succession news may have caught the markets off-guard, it appears to be an orderly change within the group", Accendo Markets analyst Artjom Hatsaturjants said as Vodafone's share price dropped 2.6 percent in London morning deals.More news: Kristen Stewart makes a political statement, ditches heels on Cannes red carpet
Last week, Vodafone paid €18.4bn to buy Liberty Global's cable TV and broadband networks in Germany and Eastern Europe.
Revenue fell 2.2 per cent to £46.5 billion compared to a year ago, due to the deconsolidation of Vodafone Netherlands and fluctuating currency rates. Fixed revenues now account for a quarter of Vodafone's income.
In a media conference call following the results, Mr Colao said: "It has been a real privilege to lead the group through a decade of massive strategic transformation culminating in today's good performance".
"We expect to sustain our profit growth in the year ahead, despite the arrival of a new entrant in Italy and competitive pressure in Spain, supported by the third year in a row of lower net operating costs".More news: NASA is sending a tiny robot helicopter to Mars
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