E. Stanley O’Neal will “retire.”

Embattled Merrill Lynch Chief Executive Stanley O’Neal has finally stepped aside, making way for a board member, Alberto Cribiore, to lead a search for a new chief.

The company characterized the departure Tuesday as a retirement, though retirements rarely go into effect immediately and without concrete succession plans. In a statement, Merrill elaborated: “Mr. O’Neal and the board of directors both agreed that a change in leadership would best enable Merrill Lynch to move forward.”

The announcement capped days of speculation about O’Neal’s future as chief executive of Merrill (nyse: MER - news - people ), which is reeling from its outsized exposure to credit derivatives and subprime debt. Last week, Merrill stunned Wall Street by reporting $8.5 billion in write-downs, far greater than it had forecast just weeks before, and its biggest ever quarterly loss.

But it still leaves open the question of who will step in to bail out the ship. Ahmass Fakahany and Gregory Fleming will remain as co-presidents and chief operating officers while the board, led by director Alberto Cribiore, considers candidates from inside and outside the company.

Here is the Merrill Lynch press release. The International Herald Tribute reflects upon O’Neal’s legacy:

Stan O’Neal’s legacy will be cemented as the $8 billion (€5.5 billion) man. That’s about the size of the massive writedown that Merrill Lynch & Co. had to take during its just-ended quarter, which has ruined the reputation of the investment bank’s CEO.

Only months ago, he was being lauded for leading the nation’s largest brokerage firm to its most profitable year ever, thanks to broad cost-cutting and expansions in Merrill’s investment banking and trading operations.

Now, Merrill has added some unwelcome firsts to its list, by reporting the biggest quarterly loss in the company’s 93-year history and by taking the largest quarterly writedown ever by a financial institution, due to the plunging value of its mortgage-related assets.

All this has stripped O’Neal, who grew up in rural Alabama and rose to become the highest-ranking black executive on Wall Street, of his star power. His good standing in corporate America is gone, as is his job. He is surely getting a quick lesson in how today’s financial world works — the focus is on “what have you done for me lately,” not what you’ve done before.

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E. Stanley O’Neal