Chairman Satoshi Tsunakawa will take over.
The move follows an internal Toshiba survey which showed trust in Kurumatani has declined.
It also follows a $20 billion bid for Toshiba by private equity company CVC which Kurumatani used to work for and which raised conflict of interest concerns.
CVC still intends to go ahead with its bid while another US private equity company, KKR of New York, is also said to be preparing a bid for Toshiba.
Kurumatani was appointed Toshiba CEO in 2018 and was the first outside appointee for over 50 years.
See also: Private equity firm bids for Toshiba