Rouzbeh Yassini, who is also the founder and former chief executive of LANcity, will be a consultant to Bay Networks and help with the transition until a replacement is found.
Yassini's departure marks the second executive to leave the networking equipment maker since it named former Intel executive David House as its new chief executive in October.
"I am in full support of Bay Networks' mission to bring standard cable modems to market in conjunction with their end-to-end data networking solutions," Yassini said in a statement. "I will continue to strongly support their efforts to develop the cable over the data marketplace and will assist in their search to locate a successor."
Yassini's departure comes within weeks of the company's chief financial officer, William Ruehle, who announced his plans to leave the company to pursue other interests.
Bay, which develops and markets routers, hubs, and switching equipment, has been fighting to regain its position in the networking industry, which faces stiff competition from such companies as heavyweight Cisco Systems.
The company also is battling its slow-to-market product performance and difficulty in operating its sales force as a cohesive group following its 1994 merger with SynOptics.