By Kasper Jade

Published: 06:00 PM EST

Microsoft Corp. on Thursday announced a two-year transition process that will ultimately end with the departure of chairman Bill Gates, who founded the company along with Paul Allen back in 1975.

The world's largest software maker said that effective July 2008, Gates will transition out of a day-to-day role in the company in order to spend more time on his global health and education work at the Bill & Melinda Gates Foundation.

Gates will continue to serve as the company's chairman and as an advisor on key projects following his departure.

Chief Technical Officer Ray Ozzie will immediately assume the title of chief software architect and begin working side by side with Gates, the company said in a statement. Similarly, Chief Technical Officer Craig Mundie will immediately take the new title of chief research and strategy officer and also work closely with Gates.

This was a hard decision for me," Gates said. "I'm very lucky to have two passions that I feel are so important and so challenging. As I prepare for this change, I firmly believe the road ahead for Microsoft is as bright as ever."

In September 2005 Microsoft Chief Executive Officer Steve Ballmer organized the company into three divisions under presidents Jim Allchin, Kevin Johnson, Robbie Bach and Jeff Raikes, who were given much greater responsibility for product development and strategy decisions within their respective businesses. In August 2005 the company appointed Kevin Turner as chief operating officer.

"Bill and I are confident we've got a great team that can step up to fill his shoes and drive Microsoft innovation forward without missing a beat," Ballmer said. "We will continue to hire the world's best technical talent and give them the tools to do their best work, and we will continue to tackle the biggest challenges and opportunities for our customers by investing for the long term."

Ballmer and Gates noted that Microsoft has been steadily expanding its senior leadership in recent years, and that today's announcement continues a transition process that has been underway for several years. In January 2000, Gates assumed the role of chief software architect and Ballmer assumed the role of CEO, responsible for all day-to-day operations and company business strategy.