Bord Failte's chief executive, Mr John Dully, will retire next month, the tourism board said yesterday.

Mr Dully, 55, is understood to have told staff in a memo that he believed the time had come for a change of leadership at the board, whose international marketing function is to be transferred to a new North-South body, Tourism Ireland.

He said he was looking forward to taking advantage of tourism facilities throughout the State during his retirement.

In a statement, Mr Dully said he was looking forward to pursuing new opportunities, but declined to comment on what they would be when asked.

While none of Mr Dully's three predecessors stayed a second term at Bord Failte, his decision is believed to have come as a surprise to certain figures in the Department of Tourism, Sport and Recreation.

His predecessors included his late brother, Mr Martin Dully, and Mr Matt McNulty and Mr Michael MacNulty.

Mr Dully was appointed in September 1998 and it is understood his contract ends in August. A career civil servant for more than 30 years, he was assistant secretary at the Department of Tourism, Sport and Recreation when appointed to Bord Failte.

Mr Dully's departure follows last month's resignation of Mr Redmond O'Donoghue from the role of chairman at Bord Failte. Mr Dully leaves Bord Failte as its faces a significant dilution in its role as key functions are transferred to Tourism Ireland , whose establishment was envisaged in the Belfast Agreement.

The board's general manager of its central marketing division, Mr Paul O'Toole, is thought to have secured the post of chief executive at Tourism Ireland, although his appointment has not yet been announced.

Observers believe the board's market operations general manager, Mr Joe Byrne, is likely to be a contender for the post of chief executive.

Crucial to the successor's task will be the ability to marshal large-scale change.

About 40 of Bord Failte's 150 Irish-based staff will transfer to Tourism Ireland, in addition to 100 international marketing personnel based at locations outside the State.