AMP Ltd chief executive Francesco De Ferrari will assume leadership of the AMP Capital business on an interim basis while a replacement for Pahari is found.
Pahari will resume work at his previous level with a focus on AMP Capital's infrastructure equity business.
Of stepping down as chairman, Murray said AMP "needs to continue its transformation" under De Ferrari with "the support and confidence of its investors, institutional clients, employees, partners and clients, without distractions".
"The Board has made it clear that it has always treated the complaint against Pahari seriously. My view remains that it was dealt with appropriately in 2017 and Pahari was penalised accordingly. However, it is clear to me that, although there is considerable support for our strategy, some shareholders did not consider Pahari's promotion to AMP Capital CEO to be appropriate.
"Although the Board's decision on the appointment was unanimous, my decision to leave reflects my role and accountability as Chairman of the Board and the need to protect continuity of management, the strategy and, to the extent possible, the Board."
Debra Hazelton, who joined the Board in June 2019, will replace Murray as chairman, effective immediately.
"On behalf of the Board, I would like to acknowledge David Murray's leadership of the AMP Board over the past two years as the business has tackled critical and highly complex challenges in AMP's transformation program. We would like to thank both David and John for their professionalism, dedication and commitment to AMP," Hazelton said.
"Under my leadership, the Board will focus on working with Francesco and his leadership team to deliver long term value for our shareholders and clients by executing the transformation strategy. I am determined to restore the trust and confidence of our clients, shareholders and employees."
