Bhatt will continue in his role until 7 December of this year and the board of directors has hired an executive search firm to identify a new President and CEO.
Progress Software is currently implementing a strategic plan, initiated by Bhatt, to increase growth, profitability and shareholder value. This plan involves cost reduction initiatives, as well as investing in its core business, which includes its OpenEdge, DataDirect Connect and Apama Analytics and Decisions products. It also plans to divest 10 of its non-core product lines.
Bhatt had announced previously that these plans were due to be completed by the end of 2013.
"I am pleased with the strides we have made in executing our strategic plan," said Bhatt.
"Progress today is solidly positioned for its next phase of growth and development and I am fully committed to driving the execution of the Company's strategy through the end of the fiscal year."
He added: "My decision to leave Progress to pursue another opportunity as the CEO of a privately held corporation in another segment of the software industry represents the fulfillment of a lifelong passion of mine and has nothing to do with my strong belief in the company's ability to continue accomplishing its strategic priorities."
Progress has also had to withdraw its revenue forecast for the fourth quarter of 2012 and said it may now 'experience some slippage' in revenue growth.
However, research director at TechMarketView, , questions whether Progress will now be able to fulfil its commitments.
She said: "His departure is unexpected given the depth of the transformation plan he devised and was in the process of executing, which included selling off many of the acquired assets that were considered non-core.
"It will leave Progress - and whoever is chosen as the replacement CEO - in a difficult position with a partially executed plan."
She added: "Bhatt, who is going to head up an unspecified privately held company, was committed to getting the business back on its feet so the sudden decision could mean the plan was taking longer than expected to produce the desired results or that maybe the board is considering putting the company up for sale."