The process to appoint a successor is already underway with BT confident it will be in a position to announce a replacement over the coming months as it readies for a period of significant change.
BT chairman Jan du Plessis said that while Mr Patterson had the backing of the board, wider support was starting to wane.
He will not now receive the 2018 incentive share plan, worth £3.5m.
Unfortunately, Patterson also presided over the ongoing problems at BT Global Services - the organisation's IT services organisation that has long weighed heavily on the group's bottom line - and the fall-out from a major accounting scandal at its Italian operation also damaged him, as did the widening deficit in BT's pension plan.
But a failure to hit a revenue target and a forecast for flat profits for the next couple of years sent its shares down to near six-year lows.
Patterson, who has been at BT for more than 14 years and became CEO in 2013, will step down from his role later this year.
His decision to exit BT follows last month's announcement that the group would cut 13,000 jobs in a bid to deliver cost savings. BT has, ultimately, massively undershot the financial goals laid down by Mr Patterson in March 2016, ' he added. However, it's been a different story over the last two years.
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The company has been reeling from an accounting scandal in Italy a year ago and has spent billions on buying football rights to attract customers to its pay-TV channels.
But the subsequent decline in the share price showed investors were not on side.
Patterson has been with the United Kingdom incumbent telco for 14 years, serving as a member of the Board for the last ten.
"The Board is fully supportive of the strategy recently set out by Gavin and his team".
Gavin Patterson, CEO of BT, speaks at the Conferederation of British Industry's annual conference in London, Britain, November 6, 2017. Throughout that time I've been immensely proud of what we've achieved, in particular the transformation of the business in recent years with the launch of BT Sport, the purchase and integration of EE, and the agreement to create greater independence for Openreach.