Microsoft Corp.'s (MSFT) Chief Financial Officer John Connors (search ) said on Tuesday he would leave the world's largest software maker after 16 years to become a partner at a Seattle-area venture capital firm.

Redmond, Washington-based Microsoft (search) did not name a successor to Connors, 45, who in the past few years guided Microsoft to its first-ever dividend, ended employee stock options and orchestrated the biggest-ever cash payout by a U.S. company.

"It's a very good time [to leave]," Connors told Reuters, adding that recent changes to Microsoft's financial structure and a strong group of internal candidates would help smooth the transition for his successor.

"It's really hard to know [the impact on Microsoft] until you know who the replacement is," said Charles Di Bona, AN analyst at Sanford C. Bernstein & Co. (search)

"When you lose someone of his caliber, it's not a good thing," Di Bona added, although he said it was unlikely Connors was leaving the company because of poor earnings performance during the latest quarter.

Connors will be joining Ignition Partners LLC, a venture capital firm based in Bellevue, Washington, located between Seattle and Microsoft's Redmond headquarters.

Connors said he works more than 55 hours A week at Microsoft and wanted to spend more time being involved with Pacific Northwest companies, initiatives and projects, and to spend more time with his wife and four children.

His last major task at Microsoft would be to report the company's latest quarterly earnings on Jan. 27 and help find a new CFO.

One possible replacement for Connors is Microsoft's corporate controller Scott Di Valerio, who came from the same position at Walt Disney Co. (DIS ) to help implement Microsoft's new financial structure.

"We have some strong internal candidates," Connors said, adding that Chief Executive Steve Ballmer, Chairman Bill Gates and the board were also looking at outside candidates.

After Connors took up the CFO post in 1999, Microsoft's annual sales almost doubled to nearly $37 billion in its latest fiscal year while cash on hand more than tripled to $64.4 billion.

Ignition, founded by former McCaw Cellular Communications and Microsoft executives, the former CEO of AT&T Wireless and a former Starbucks Corp. treasurer, invests in technology companies and recently closed its third fund of $300 million.

According to the latest regulatory filing, Connors owns nearly $8 million in Microsoft stock, though his net worth would presumably be higher from past stock sales and other investments.

Connors is well regarded by the investor and analyst community for his folksy yet accurate delivery of financial information at quarterly earnings and analyst presentations and annual meetings.

In 2003, Connors also oversaw the implementation of a new financial reporting structure at Microsoft by installing a chief financial officer for each of the company's seven business units, giving them more autonomy and control over their targets.

That same year, Microsoft also ended it long-held practice of awarding lucrative stock options, which minted scores of millionaires at Microsoft since the mid-eighties, and instead began rewarding employees with direct stock awards.

Last year, Connors oversaw Microsoft's $75 billion cash payout from the company's growing cash hoard by doubling the dividend, boosting stock repurchases and issuing a special dividend.