Bill Gates on Thursday announced his intention to leave his full-time role at Microsoft, drawing the curtain on a controversial business career that more than any other shaped the first half century of the information age and turned him into the world's richest man.

Mr Gates, a Harvard drop-out who founded Microsoft along with Paul Allen more than 30 years ago, said he would switch his full-time attention to philanthropy, continuing the work on global health and education that has come to increasingly absorb his time in recent years.

The Microsoft chairman will step down completely in July 2008. However, he will hand over his responsibility for its software strategy immediately and will reduce his involvement in the company progressively during the two-year transition period.

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Mr Gates said he hoped to stay as chairman of Microsoft "for the rest of my life," and that the company's directors had supported this idea. "I don't see a time in the future when I won't be the chairman of the company," he said.

Though he stepped down as chief executive officer in 2000, at the height of a US government anti-trust case against the PC software maker, Mr Gates has continued to hold the title of chief software architect and has been seen as the chief visionary behind its strategy.

Steve Ballmer, Microsoft's chief executive, said Mr Gates was "now headed, in my opinion, to become the greatest philanthropist of all time."

The reshuffle at Microsoft will catapult an outsider into the top technical job at the world's biggest software company. Ray Ozzie, who joined Microsoft early last year after the company bought his small software concern, Groove, will take on the title of chief software architect immediately.

Mr Gates said he believed Microsoft could manage the two-year transition "without skipping a beat". He described his planned move as "not a retirement but a reordering of my priorities".

Mr Ballmer said he felt emotional at the prospect of Mr Gates' move given the closeness of their relationship but that he was confident of a "smooth and orderly transition".

The Bill and Melinda Gates Foundation has assets of $35bn and dispenses annual grants of $1.4bn. Mr Gates said he would work for the organisation, which focuses on global health and education projects, from July 2008.

"This was a hard decision for me," Mr Gates said. "I'm very lucky to have two passions that I feel are so important and so challenging."

He said he believed "the road ahead for Microsoft is as bright as ever.''