WASHINGTON - US President Barack Obama announced on Thursday that former Federal Reserve Chairman Paul Volcker was stepping down from his role as head of an outside panel advising the White House on economic policy.

"From his bold vision around how to reform our financial system to his thoughtful insight on how to make our economy work for working families again, Paul brought his brilliance and vast experience to bear on a host of difficult challenges," Obama said in a statement.

"I will always be grateful to Paul Volcker for his service as the head of my Economic Recovery Advisory Board," Obama said.

Reuters reported earlier this month that Volcker intended to leave the advisory board.

The White House order creating the panel expires on Feb 6 and sources said Obama plans to reconfigure it to focus more on business outreach.

General Electric Co chief executive Jeffrey Immelt is seen as top candidate to head the new board.