Neeleman, who owns 6 percent of the New York-based airline's shares, will stay on as the company's non-executive chairman, while Dave Barger, its current chief operating officer, takes over as CEO.
Neeleman, whose airline brought live TV and a renewed emphasis on customer service to the skies, called the move a "natural evolution" of the company's leadership structure.
"As chairman of the board of directors, I will focus on developing JetBlue's long-term vision and strategy," he said in a statement.
In February, JetBlue's image as a customer-friendly airline was tainted when a snowstorm left thousands of travelers stranded in planes and airports throughout the northeast. Despite the public-relations damage, Neeleman refused to resign over the incident. The company subsequently took out full-page ads apologizing to travelers and presenting a customer bill of rights.
Neeleman founded the airline in 1998, after creating WestJet, a low-cost Canadian airline, in the mid-1990s. Today JetBlue offers up to 575 daily flights to 52 cities. Costs are kept low by operating only one type jet, rather than the higher maintenance and repair expenses of a fleet of different jets. Neeleman, who keeps his own salary low, is known to travel aboard flights in order to gauge customer satisfaction with the airline.