Boeing on Friday said that it took the action to allow Muilenburg to focus on running the company as it returns the MAX fleet to service after it was grounded in March the crashes that took place in less than five months, Efe news reported.
The leadership change came hours after a panel or air-safety experts sharply criticized Boeing and the US Federal Aviation Administration for mis-steps that led to the crashes, which killed a total of 346 people.
David Calhoun, a senior Blackstone Group Inc. executive who has been the Boeing board's lead director, will become its chairman.
The board has "full confidence in Dennis as CEO and believes this division of labour will enable maximum focus on running the business with the board playing an active oversight role", Calhoun said in a statement.
Getting control of the crisis proved challenging for Muilenburg, who is slated to testify before a House committee at the end of the month.
The prolonged grounding of the MAX, the Chicago-based aerospace giant's best-selling jet, has disrupted the plans of airlines and passengers around the world. Boeing is considering additional cuts to production or temporarily shutting down MAX assembly at the Renton, Washington, plant where the airplane is built.
The manufacturer has faced repeated setbacks in getting the MAX flying again. An update to the MAX flight-control software to fix problems with the jet had previously been expected to gain FAA approval as early as April.
The discovery of another potential safety risk has added to delays.
Three US operators of the MAX - United Airlines Holdings Inc., American Airlines Group Inc. and Southwest Airlines Co. - don't expect to resume flying passengers on the aircraft until early next year.
Muilenburg said he fully supported the board's move and that the team was focused on returning the 737 MAX safely to service.
He will remain a director on the board.
( With inputs from IANS )