Cilla Snowball will take on his role as the chief executive and chairman of the AMV Group, alongside her role as the chairman of AMV BBDO and Proximity London.
Baulk will leave the agency he helped grow from 20th-largest in the UK by revenue to the biggest on June 30 2006.
He said: "Leaving after 20 years at AMV has a neatness and completeness about it. I now feel that I have given the company everything I have available to give and that the correct people are in place to push it forward.
"But my entire career has been a wonderful ride. In more than 40 years in the industry, I have worked with some of advertising's biggest legends, from David Ogilvy to Peter Mead."
Andrew Robertson, BBDO Worldwide's chief executive, who first worked with Baulk in 1982, added: "Michael inspired me. There have been thousands of moments when I have thought 'how would Michael play this?'"
Baulk will now take a six-month sabbatical but has no plans to retire completely. As well as sitting on the board of RHM Foods, he is considering a number of offers in various creative industries.
He said: "I definitely want to stay in the creative business, but I will not be at another agency. There are plenty of adjunctive areas I would like to move into, such as television, film or sports."
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