The company's board said on Monday that Sharma has resigned due to "personal reasons".
The company has consequently appointed Ravinder Takkar as its MD and CEO.
The board said that Sharma would take up a new role with the Vodafone Group, which will be announced in due course.
Sharma's departure from the top post, however, is being seen as a casualty of the ongoing stress in the telecom sector. He was appointed the first CEO of merged entity Vodafone Idea less than a year ago.
The company is not doing well on the financial front and is also continuously losing subscribers.
"The Board of Vodafone Idea Ltd today (Monday) announced that it has accepted Balesh Sharma's request for personal reasons to step down as CEO of Vodafone Idea," the company said in a statement.
The statement noted that Sharma has overseen the successful integration of Vodafone Idea, resulting in the estimated timeframe to complete the integration falling from four to just two years.
"Balesh has driven the strategy of the combined business since its formation and he has also spearheaded the largest-ever equity raise in India," the company said.
Takkar, who will takeover as MD and CEO with immediate effect, has been appointed for a three-year period.
He is currently a Non-Executive Director on the board of the company and that of Indus Towers, where he is responsible for all Vodafone Group interests in India, the company said in a regulatory filing.
( With inputs from IANS )