The head of Britain's Financial Conduct Authority has decided to step down, the financial market regulator said on Friday.

"The FCA today announced that Martin Wheatley is to stand down as Chief Executive with effect from September 12, 2015," it said in a statement.

Finance minister George Osborne praised Wheatley for doing a "brilliant job" but added that the regulator now needed "different leadership".

Meanwhile, it was reported that Wheatley had resigned after the Treasury informed him it would not be renewing his position on the FCA board that was up for review in 2016, Bloomberg News reported, citing a person with knowledge of the matter.

FCA executive board member Tracey McDermott will take on the role of acting chief executive while the organisation searches for a new boss.

Wheatley, who launched the FCA four years ago following a regulatory overhaul,  will continue to act as an adviser to the board until January 31, 2016.

"Britain needs a tough, strong financial conduct regulator. Martin Wheatley has done a brilliant job of launching the FCA in tough circumstances," Osborne said.

"Now that phase is complete, the government believes that different leadership is required to build on those foundations and take the organisation to the next stage of its development."

FCA Chairman John Griffith-Jones added: "Martin has done an outstanding job as Chief Executive setting up and leading the FCA over the last four years."