He will give up his role as chief executive, remaining for a time as Viacom searches for someone to take his place.
Brad Grey will give up his role as chief executive at Paramount, remaining for a time as Viacom searches for someone to take his place, according to a release.
"It has been my privilege to be a part of Paramount's storied history, and I am grateful to Sumner Redstone for giving me this opportunity," said Grey, who took on his role at the company in 2005.
Paramount is a historic Hollywood studio, having produced blockbusters including "Titanic," "Forrest Gump," "Ghost," "The Godfather," "Indiana Jones," "Mission Impossible," and "Transformers."
However, the film studio has suffered from a lack of box-office successes in recent years, and even fielded several flops including an undated remake of the classic "Ben Hur."
Viacom's staggered fiscal year ended in September, with the studios seeing revenue drop by eight percent and incurring an operating loss of $445 million.
Paramount lost more money in the quarter that began in October.
A clash over the future of the studios erupted into a legal battle between Viacom ex-CEO Philippe Dauman and the Redstone family.
The Redstone family, through its National Amusements holding company, controls Viacom, which includes an array of television operations and the Paramount studios in Hollywood, as well as television giant CBS.
Dauman wanted to bail out the studios by selling a minority stake to an outside company, a strategy the Redstones opposed.
Dauman had filed legal actions claiming the aging Redstone was unable to manage his affairs and had been manipulated by his daughter Shari.
Dauman eventually dropped his lawsuit as part of an agreement to leave the company, which controls Paramount, a global television empire that includes MTV, Comedy Central, Nickelodeon and other properties, with operations in 180 countries.
Sumner Redstone, the 93-year-old media tycoon whose health has been questioned, in December stepped down from the board of his conglomerate Viacom.
It marked a further step back for Redstone, whose failing health was an object of litigation as his daughter Shari assumed increasing control of his corporate empire.
Dauman eventually resigned and was replaced by Bob Bakish, who announced Grey's departure on Wednesday.
Paramount last month announced it was partnering with two Chinese film-industry companies in a deal that would provide a cash infusion for the Hollywood giant.
Paramount signed a three-year agreement with Shanghai Film Group and Beijing-based Huahua Media to co-finance and co-produce all of the US studio's films, Paramount said in a statement on China's twitter-like Weibo platform.
Paramount will also produce content for the group's television channels.