Andrew Forrest has quit as chief executive of Fortescue Metals, the Perth-based iron ore mining company he founded.

The company says Mr Forrest will leave the chief executive role on July 18 - the company's eighth anniversary - and will assume chairmanship of Fortescue on August 18.

Fortescue says Mr Forrest instigated the process of finding his replacement almost three years ago, and a formal search for a new CEO had been underway for a year.

The company has announced that its chief operating officer Neville (Nev) Power will take over as chief executive when Mr Forrest retires.

Mr Power previously held senior executive roles with engineering company Thiess and Smorgon Steel before joining Fortescue.

The current chairman Herb Elliott will stay on with the company as deputy non-executive chairman when Mr Forrest becomes chairman in August, and praised Andrew Forrest's contribution to the company.

"Andrew's determination, vision and leadership have been the key point of difference for Fortescue," he added.

"Shareholders are fortunate Andrew has accepted the board's offer to become chairman and remain closely involved with the delivery of Fortescue's growth plans."

The leadership reshuffle at FMG comes months after a Federal Court ruling that Mr Forrest breached the Corporations Act in 2004.

The court found he gave misleading information to the share market over the nature of agreements with Chinese companies.

Mr Forrest says his resignation from the top job has nothing to do with the prospect of being banned from running a company.

He says his decision was based on devoting more time and effort to his community work.

"I've made no secret that I've been spending up to 50 per cent of my time on philanthropic endeavours," he said.

"I think in all good responsibility for a chief executive when you're spending that much time you need to step down as chief executive, appoint someone who can really do that job better than you."

Resource analyst Tim Treadgold says he doubts the move will have any impact.

"In theory he could play a different kind of role, in practice I doubt that anything will happen," he said.

I doubt that they'll even switch offices and they'll probably be sitting in the same chairs. There might be a new name on the door but Andrew will remain in charge of the company and people will do what he tells them."

Mr Treadgold says Mr Forrest still owns 30 per cent of the company and will control it, no matter what his title is.

Fortescue's shares were up 5 cents to $6.57 after the news, amid more subdued gains for its larger rivals BHP Billiton and Rio.