Fletcher will join Ofwat as CEO on 8 January, and Ofgem is looking for her replacement.
Ofgem’s chief executive Dermot Nolan said he is “disappointed” to be losing Rachel Fletcher but her new role at Ofwat will be “good news” for consumers.
She will take over as the water regulator’s new chief executive, replacing Cathryn Ross, who will be departing for BT.
Fletcher will join Ofwat from Ofgem where she is senior partner for consumers and competition and sits on the Ofgem board.
Ofgem said the consumers and competition division will be managed on an interim basis from January by Rob Salter-Church (pictured), currently partner for consumers and competition, until a replacement is appointed.
Dermot Nolan, chief executive of Ofgem, said: “While I am disappointed on a personal level that Rachel is leaving Ofgem, her appointment as chief executive of Ofwat is good news for consumers.
“Rachel will bring a wide range of regulatory experience to the water sector. She has been a tremendous force for good during her time at Ofgem and has worked tirelessly to deliver a better energy deal for consumers.”