He leaves on 30 June 2014 and will be replaced by Haydn Mursell, currently group finance director.
Headhunters have been appointed to find a new finance director.
Paul Sheffield, aged 52, has spent his entire career with Kier since joining as a graduate engineer more than 30 years ago. He became managing director of Kier Construction in 2001 and joined the group board in 2005. He took over as group chief executive in April 2010.
Explaining his surprise decision, Paul Sheffield said: "Since I joined Kier in 1983, the group has grown enormously, both in scale and the services it offers. I'm very proud of what we have accomplished, but feel it is now the right time to transition the leadership of the group. I know that Haydn will do an excellent job leading Kier in the next phase of its development and I wish him every success in his new role."
His chairman, Phil White, said: "I would like to express our thanks to Paul for his long-serving commitment to Kier. He joined Kier in 1983 and his contribution over 30 years with the Group has been considerable, most recently guiding the acquisition and integration of May Gurney.聽 After a handover period, Paul will leave with our very best wishes for the future."
Haydn Mursell, pictured below, joined Kier in August 2010 from Balfour Beatty where he had been deputy finance director. In June 2013 he also assumed operational responsibility for Kier鈥檚 property division. He is a member of the Institute of Chartered Accountants, having trained and qualified in the contracting, housing and energy sectors of KPMG London, working with clients like John Laing and National Power. Combining his roles at KPMG, Bovis Lend Lease, Balfour Beatty and Kier, he has over 20 years of experience working in the built environment and construction sector. 
He has said of working in construction: "I get tremendous satisfaction from working in the sector. In this industry we produce something incredibly tangible, which makes a very real contribution to our landscapes, our communities and all of our lives."
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