"Christoph Franz has informed Deutsche Lufthansa AG that he is not available for an extension of his contract as chairman of the executive board and CEO," Lufthansa said in a statement.
Switzerland's Roche said in a statement that Franz has been nominated to succeed its chief Franz Humer, who plans to retire early next year.
Roche said Franz would be proposed formally to its shareholders at the group's annual meeting on March 4th.
Franz said he was "delighted" to be joining the Basel-based giant.
"Roche is an outstanding company," Franz said.
"As a board member I have had ample opportunity to get to know and admire its strong business performance and corporate culture," he said.
"Strategically, Roche is in very good shape, and I am looking forward to taking on this opportunity."
Humer, a 67-year-old Austrian and Swiss dual citizen, has been with Roche since 1995.
He became chief operating officer in 1998 and chairman in 2001.
Humer lauded 53-year-old Franz, saying that Roche was "getting a chairman with outstanding personal qualities and an impressive record as head of a major global company".
Swiss-based analysts Helvea echoed that, saying Franz's track record was crucial and that "the proposed election looks to be positive for Roche's future".
Franz's intentions to leave Germany's flagship carrier, which he has headed since January 2011, were first reported on Sunday in the Die Welt online edition, which quoted his inner circle.
Switzerland's Neue Zürcher Zeiting had meanwhile said he was poised to take over at Roche.
Franz has carved out his career in the transport sector, having moved between Lufthansa and German rail company Deutsche Bahn.
But the German also knows the pharmaceutical sector from serving on Roche's supervisory board since 2011.
He has strong ties with Switzerland, having led the Lufthansa-owned company Swiss International Air Lines from 2004 to 2009, turning around the airline which was crafted from defunct carrier Swissair.
Franz said the decision to leave — after 15 years in the Lufthansa group — was "anything but easy".
"I like working for this company," he said.
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"But for career reasons, I have decided to end my work for the Lufthansa group once my contract expires in May 2014."
By that time, the airline's restructuring programme and key investment decisions "will have laid the foundation for Lufthansa's future success," Franz said.
"That is a suitable time for a change in management," he added.
Lufthansa's supervisory board chief Wolfgang Mayrhuber said he "regretted" Franz's decision to quit.
Investors appeared somewhat unnerved over Lufthansa's future after the announcement.
The airline's shares were among the few losers on the blue-chip DAX index on the Frankfurt stock exchange, slipping by 0.25 percent while the overall market was up 1.19 percent.
On Zurich's SMI, Roche's stock rose 0.59 percent while the overall index was up 0.56 percent.