Volkswagen Group said former BMW executive Markus Duesmann will head its Audi brand, effective April 1.
Current Audi chief Bram Schot, 58, will leave the company by "amicable mutual agreement" on March 31, VW Group said.
Duesmann, 50, is an engine development expert and former head of purchasing at BMW.
Duesmann is an "excellent engineer" and will do everything in his power to "leverage the full potential of the Audi brand and as such will once more demonstrate our commitment to the promise Vorsprung durch Technik," VW Group CEO Herbert Diess said in a statement on Friday.
Duesmann is the third high-profile defection from rival German automaker BMW after VW recruited Diess in July 2015 and hired Hildegard Wortmann as Audi's sales boss this summer.
Duesmann, a mechanical engineer, came to BMW in 2007 from Mercedes-Benz, where he was head of powertrain for the Formula One team. He was named BMW's purchasing chief, a role previously held by Diess, in 2016.
VW Group has been on the lookout for clean-engine expertise at Audi, which fired a number of developers in the wake of an emissions-cheating scandal that has left the premium brand adrift.
BMW held up the move but dropped its opposition to Duesmann's early departure, the Frankfurter Allgemeine Zeitung reported in September.
Audi appointed Schot, its former sales and marketing chief, as CEO in January when it was unclear whether BMW would release Duesmann from a non-compete clause.
Schot had held the CEO role on an interim basis after Munich prosecutors detained former chief executive Rupert Stadler in June 2018 for his alleged role in helping to bring Audi diesel cars equipped with illegal software on to the European market.
Stadler and three other defendants have been charged with false certification and criminal advertising practices.
Reuters contributed to this report