"Continuing his 17 years of service to the company, he'll now be helping us as a technical advisor on science and technology issues".
Schmidt has served in senior roles at Google since 2001 when he was first brought on by Sergey Brian and Larry Page to serve as Google's chief executive.
Larry Page, CEO of Alphabet, praised the now-former Executive Chairman by saying the following.
"Larry, Sergey, Sundar and I all believe that the time is right in Alphabet's evolution for this transition", he said in the statement.
In October 2015, Google launched a new structure that made Alphabet Inc. the holding company for Google and related businesses.
China criticizes US's 'cold war mentality' after Trump speech
Chinese Foreign Ministry spokeswoman Hua Chunying warned Washington that failure to do so "would only harm itself as well as others".
Schmidt said he's been spending a lot of time on science and technology issues, as well as philanthropy, and he expects to do more of that. Around the time of the company's 2004 IPO, the trio reportedly pledged to work together for another 20 years.
Schmidt took over the helm when Google was a three-year-old company run by the relatively inexperienced Brin and Page.
Page, in a statement Thursday, alluded to the new generation at Alphabet and Google. "I'm incredible excited about the progress our companies are making, and about the strong leaders who are driving that innovation".
The longtime executive will transition to becoming a technical advisor when the company holds its regular board meeting in January.
Sterling edges up but traders cautious on Brexit talks
Guidelines covering the future relationship will be presented to the leaders of the remaining 27 states at a European Council summit in March, Mr Barnier said.
Eric Schmidt has always been a major figure in Google and even when the company transitioned to Alphabet.
Like many high-profile tech figures, Schmidt has increasingly turned his hand to philanthropy.
Ultimately, this move could help Google's public image.
In August, Schmidt thrust Google into a negative spotlight when Barry C. Lynn, a scholar at the New America Foundation, claimed that the executive had forced him out for applauding the European Union's decision to levy a record US$2.7 billion fine against the company.
Street artists target Meryl Streep with 'She knew' posters
Posters have popped up across Los Angeles depicting Meryl Streep as a Harvey Weinstein enabler. McGowan has alleged that Weinstein raped her.