Current CEO James Gorman will take over the chairman's role.
Mack is largely credited with saving the investment bank during the financial crisis for negotiating a $9 billion investment from the Japanese bank Mitsubishi UFJ Financial Group. However, Mack was criticized for the firm's poor performance during and after the crisis before handing over the CEO spot to Gorman in 2010.
Morgan Stanley stock jumped 6 percent to $16.46 as of 12:45 p.m.