Hayward, who has been widely criticized for his handling of the Gulf of Mexico oil spill and a series of public blunders, will be replaced by American Bob Dudley.
Dudley took over the day to day handling of the clean up operation from Hayward and has sought to reassure the people of the Gulf Coast that he will “make it right”.
Speaking about his departure, Hayward says: “I believe the decision I have reached with the board to step down is consistent with the responsibility BP has shown throughout these terrible events. BP will be a changed company as a result of Macondo and it is right that it should embark on its next phase under new leadership.”
Hayward will step down from 1 October and will receive a controversial £1m payout in lieu of a year’s salary and will receive a yearly pension payout of around £600,000.
The oil firm has had to set aside $32.2bn (£20.8bn) to cover future costs of the clean up operation following the oil spill. The figure includes the previously announced $20bn (£12.9bn) compensation fund.
BP plans to sell assets worth up to $30bn (£19.3bn) over the next 18 months to raise funds.
BP chairman Carl-Henric Svanberg, says: “The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident. BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world’s energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board.
Excluding the clean up costs set aside, BP’s operational profits almost doubled to $5bn (£3.2bn) compared to the same quarter a year ago.
Environmental lobby group Greenpeace has launched a campaign today to disable BP petrol stations across central London in a bid to “stop the oil giant from selling its dirty fuel”.
Activist groups acting under the tag line “BP station closed. Moving beyond Petroleum” have shut off the flow of fuel at stations.
The group claims to have shut down 46 stations at the time of writing.