Mundie is taking on a new role as a senior adviser to Chief Executive Steve Ballmer, according to a memo circulated internally earlier this month but only made public on Monday.
Eric Rudder, another Microsoft veteran, is taking on responsibility for Microsoft Research, Trustworthy Computing, and the Technology Policy Group, which were all run by Mundie.
A 20-year Microsoft veteran, Mundie was one of two men hand-picked by co-founder Gates to take over leadership of the technical side of Microsoft when he retired from day-to-day work at the company in 2008.
Mundie took over responsibility for the company's long-term research activities, while Ray Ozzie became chief software architect. Ozzie left Microsoft in 2010. According to Ballmer's memo, Mundie will retire from Microsoft in 2014, when he will be 65.
Mundie's new role was first reported on Monday by the All Things D tech blog.
(Reporting By Bill Rigby; Editing by Steve Orlofsky)