Bill Daley, the former bank executive and political operative who has been President Obama's chief of staff for the past year is leaving and will be replaced by Office of Management and Budget Director Jack Lew, Obama announced Monday.

Daley, who had been a senior executive of J.P. Morgan Chase and a secretary of commerce during the Clinton administration, was brought in after the tumultuous tenure of Rahm Emanuel as chief of staff.

Emanuel is now mayor of Chicago and succeeded Daley's brother, Richard, in that position.

“I have been honored to be a small part of your administration,'' Daley told Obama at the White House. “It is time for me to go back to the city I love.”

Daley was brought in in part to help smooth over relations with the business community which had been strained as a result of Obama's health care reform efforts and the Dodd-Frank financial overhaul bill. But there were media reports that he didn't gel with other staff members.

Lew has had two stints as head of the Office of the Management and Budget, was a deputy secretary of state and an executive of Citigroup.