KPMG South Africa said on Wednesday that Chief Executive Nhlamulo Dlomu will step down to allow a new leader to restore the auditor's reputation after a corruption scandal that saw the company lose several major clients.
The new CEO will be recruited externally, it said.
KPMG South Africa has cut jobs and lost business over work done for a company owned by the Gupta family, friends of former president Jacob Zuma who were accused of unduly influencing the award of billions of rand in government contracts.
The Guptas and Zuma have denied any wrongdoing.
"Given the scale of the reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive from outside the firm, with strong industry experience, will optimise prospects of rebuilding trust," KPMG said in a statement.
Dlomu will remain at the company, taking on a newly created global role focusing on ethical leadership and organisational culture change, it said.