Malcolm Gillies, who has served as head of the embattled institution for nearly four years, will leave the university in 12 months’ time.
In a statement, London Met said that his retirement was “timed carefully to support the development of the next stage of the university’s strategic plan”.
In April 2011 Professor Gillies set out a radical plan to cut the number of courses offered at the university by two thirds, including those in history, philosophy and the performing arts, to save money.
The university also hit the headlines in July 2012 when it had its licence to sponsor international students suspended, and then fully revoked the following month.
The decision sent shock waves through the sector, but London Met won back its licence in April this year.
Professor Gillies also courted controversy in April 2012 by suggesting that some of the university’s campus would be made alcohol-free because some students, including Muslims, found alcohol “immoral”.
He was appointed head of London Met in 2010 after resigning as vice-chancellor from City University the previous year.
Professor Gillies arrived after London Met had been forced to pay back £36 million to the Higher Education Funding Council for England after major inaccuracies were discovered in its student-completion data.
Clive Jones, chair of the board of governors commented: “Malcolm came to London Met at its moment of greatest distress, and is bringing a much-needed administrative and academic discipline to a great university.
“We shall celebrate that later next year. Meanwhile, the university will soon advertise for a new vice-chancellor, to continue the momentum of change,” he added.