Though Lucas will remain CEO of the company he founded, the move advances his planned retirement, something he has mentioned on several occasions.
Lucas and Kennedy will jointly run the film production side of the company while Micheline Chau will continue to run day-to-day operations as president and COO.
Kennedy will leave her post at her production company, Kennedy/Marshall, which she founded with husband Frank Marshall. Lucas will transition over the next year or two, a company spokesperson told TheWrap.
"I've spent my life building Lucasfilm and as I shift my focus into other directions I wanted to make sure it was in the hands of someone equipped to carry my vision into the future," Lucas said in a statement. "It was important that my successor not only be someone with great creative passion and proven leadership abilities, but also someone who loves movies.”
"So for me Kathy was the obvious choice, she is a trusted friend and one of the most respected producers and executives in the industry," he added.
Lucas and Kennedy have had a working relationship since "Raiders of the Lost Ark," which marked the beginning of Kennedy's collaboration with another Hollywood legend, Steven Spielberg. The two have continued to work together; currently, Kennedy/Marshall is in post-production on Spielberg's upcoming biopic, "Lincoln."
"George is a true visionary," Kennedy said in a statement. "I've seen him build Lucasfilm from a small rebel unit in Northern California to an international fully integrated entertainment company. George and I have talked about the enormous opportunities that lie ahead for the company, and as George moves towards retirement I am honored that he trusts me with taking care of the beloved film franchises. I feel fortunate to have George working with me for the next year or two as I take on this role–it is nice to have Yoda by your side."