Tim Tookey, chief financial officer at the institution will take over as interim CEO from the banking head, who joined Lloyds from the British unit of the Spanish financial institution Santander earlier in the year.
In a statement, Lloyds said: âThe board of Lloyds Banking Group announces that following medical advice Antonio Horta-Osorio is taking a temporary leave of absence from his duties as group chief executive of the bank due to illness.â
He is expected to return to his role as CEO at Lloyds before the end of the year.
According to news reports, Mr Horta-Osorio is believed to be suffering from fatigue although the bank itself did not provide any details on his illness.
Although Mr Tookey has been appointed as his successor for the meantime, he himself is due to leave the financial institution in the early months of 2012.
The financial institution is still 41 per cent owned by the government following its bail out during the financial crisis.
By Jim Ottewill