"We have entered into an agreement with Vijay Mallya under which he has resigned from his position as chairman and non-executive director of United Spirits Ltd and from the boards of other USL group companies," the London-based Diageo said in a filing to the London Stock Exchange.
Soon after Mallya's resignation, the USL board appointed non-executive director Mahendra Kumar Sharma as the company's new chairman.
As part of the agreement, Mallya will be paid $75 million over a five-year period, including $40 million (Rs.275 crore) in the first year and the balance over four years.
With this resignation, Dr Mallya no longer has any authority or responsibility within the USL group said Abanti Sankaranarayanan of United Spirits.
There is a 5-year global non compete, non-solicitation arrangement: United Spirits Ltd on Vijay Mallya's resignation, she said.