Steinhafel, CEO of the US retail giant since 2008, will resign immediately as CEO and chairman of the board.
Chief financial officer John Mulligan has been appointed interim CEO, the company said.
“After extensive discussions, the board and Gregg Steinhafel have decided that now is the right time for new leadership at Target,” the company said in a statement on Monday.
In December Target, the third largest US retailer in 2012 with total sales of $US73.3 billion ($A79.3 billion), disclosed that hackers successfully infiltrated the company’s information systems, obtaining credit card data for some 40 million customers.
In January the company revealed that the hackers stole an additional trove of data with personal information such as home and email addresses for up to 70 million customers.
The data breach, one of the biggest in retail history, hit sales during the critical holiday shopping period and spurred congressional hearings on the vulnerability of customer information in an era of increasingly sophisticated hacking efforts.
Sales fell 6.6 per cent across the company’s nearly 1800 stores in the US in the fiscal fourth quarter, covering the three months to February 1 2014, hurt by both the data loss and heavy discounting during the holiday season. Sales fell 0.9 per cent for the full year.
In the wake of the breach Steinhafel quickly moved to shore up customer confidence, green lighting plans to provide free credit monitoring and identity theft insurance to shoppers.
“Gregg led the response to Target’s 2013 data breach. He held himself personally accountable and pledged that Target would emerge a better company,” the company said.