O2 UK Chief Executive Ronan Dunne is leaving the company at the end of this month and will be replaced by his finance chief Mark Evans.
The change comes two months after the European Commission blocked the merger of O2 and Three in the UK on competition grounds.
Telefónica, which wanted to dispose of its UK subsidiary to boost its balance sheet, announced two weeks ago that it had pulled the plug on a sale.
This came just a week after the UK voted to leave the European Union.
Dunne, who ends a 15-year stint at the UK-based mobile operator, said the decision to reconsolidate the business into parent company Telefónica represented “an important and positive milestone for the business".
During his tenure, O2 UK grew its customer base from 18 million to 25 million.
Evans, who has been CFO since January 2012, also serves as Chairman of Tesco Mobile.
He has previously been CFO at Vodafone and Group Financial Controller at Virgin Media.
Evans said: “I am hugely excited by the opportunity to lead O2 through its next chapter.
“O2 has a track record in redefining itself to keep pace with technology change and customer demand, and has an enormous amount to offer within the evolving telecoms market.”
José María Álvarez-Pallete, Executive Chairman of Telefónica SA commented: “I am delighted to announce the appointment of Mark Evans as CEO of Telefónica UK.
“Mark’s contribution as CFO has been instrumental in delivering revenue and profit growth over the last four years and I know the business will be in good hands with him as leader.
“I would also like to take this opportunity to thank Ronan for his outstanding leadership, dedication and achievements not only as O2’s longest serving CEO but his support and contribution as a member of the group executive to Telefónica’s transformation journey.
“He has led the O2 brand to achieve great things on behalf of its customers, employees and shareholders and built a team of talent to be proud of.”