The board of directors elected Ramon Laguarta, who has been with the company for 22 years, to succeed Nooyi as CEO. She will remain chairman until early 2019 to ensure a smooth and seamless transition.
"Laguarta will take over from Nooyi on October 3 and will also join the board", the company said in a statement.
Under Nooyi's leadership, PepsiCo witnessed a net revenue growth from $35 billion in 2006 to $63.5 billion in 2017 and a compound annual growth rate of 5.5%.More news: Apple is shutting down its App Store Affiliate Program for apps
PepsiCo president Ramon Laguarta will replace Nooyi, the company added.
Nooyi, who was born in India, is a rarity on Wall Street as a woman and a minority leading a Fortune 100 company.
Nooyi became CEO in 2006. Guided by our philosophy of Performance with objective - delivering sustained performance while making more nutritious products, limiting our environmental footprint and lifting up all the communities we serve - we've made a more meaningful impact in people's lives than I ever dreamed possible.More news: Trump is losing the trade war, according to his favourite measure
Indian-origin Nooyi has been at the helm of the New York-based company for 12 years. Since September 2017, Laguarta has served as President of PepsiCo, overseeing global operations, corporate strategy, public policy and government affairs. Dividends per share almost tripled from $1.16 in 2006 to $3.17 in 2017 and a compound annual growth rate of almost 10%, according to a PepsiCo statement.
She is also largely credited with re-shaping Pepsi with tactical mergers and shifting to healthier drinks over sugary sodas - moving to juices and teas.
Climbing up the ladder at PepsiCo was not easy but steady results in successive junctures made Nooyi prevail.More news: The Facts Of Life star Charlotte Rae dies days after reboot news