Colao has returned the company to organic growth and decent cash generation by focusing on core geographies and investing in next generation fixed and mobile networks and unified communications as well as digital transformation and operating efficiencies.
"Nick has been the co-architect of the Group's strategy together with Vittorio, combining extensive global operational and commercial leadership with world-class financial acumen", commented Gerard Kleisterlee, the Group's Chairman.
He said: "He has been an exemplary leader and strategic visionary who has overseen a dramatic transformation of Vodafone into a global pacesetter in converged communications, ready for the Gigabit future". Read will officially step into the CEO role on October 1, and the CFO post will be filled by current deputy CFO Margherita Della Valle.
Mr Colao, who previously ran Vodafone's Italian business before being appointed chief executive in 2008, will be replaced by the FTSE 100 firm's chief financial officer Nick Read.
"Nick has been the co-architect of the Group's strategy together with Vittorio, combining extensive worldwide operational and commercial leadership with world-class financial acumen".
The announcement came as Vodafone reported an annual profit of €2.8bn (£2.5bn), compared with a loss of €6.1bn previous year when it wrote down the value of its Indian business. He also served on the boards of Vodacom Group and Vodafone India.
Telecommunication giant Vodafone's CEO Vittorio Colao stepped down from his position on Tuesday.
For Read it's a "step-up" role, after a good track record at Vodafone, said James Ratzer, a telecom analyst at New Street Research in London.
The turnaround pointed to a "year of significant operational and strategic achievement and strong financial performance", Colao said, as quoted by AFP. As a result, underlying EBITDA grew 7.9%.
"It's a new chapter that will take five years and beyond to be written. and it's right to start with a new dedicated management team". In addition, we agreed the merger of Indus Towers and Bharti Infratel, allowing Vodafone to own a significant co-controlling stake in India's largest listed tower company.
Vodafone's operating profit rose to €4.3 billion compared to €3.7 billion in the prior year, reflecting operational leverage and the benefit of cost efficiency initiatives.
"The overall improvement in Vodafone's fortunes over the last 10 years is less evident in the United Kingdom, the company's worst major European market, albeit that some of this reflects an inherently more competitive mobile market with four strong players", he added.