Barclays on Tuesday elevated Bob Diamond to chief executive in a move that installs an American at the helm of the venerable British banking institution.

In an unexpected shake-up, the giant London-based bank announced Tuesday morning that Diamond, Barclays's president and investment banking chief, will replace current chief executive John Varley. Diamond will be deputy group chief from October 1. After serving as CEO since September 2004, Varley will step down on March 31, at which time Diamond will take over.