Mr Suard, who had been banned from contact with any of Alcatel's 200,000 employees, stepped down just hours before the company's board was expected to dismiss him.
He was one of France's most influential and well connected businessmen, but was put under investigation last year after claims that his company overcharged the state-owned France Telecom.
Mr Suard, 60, who oversaw a doubling of turnover at Alcatel during his eight-year reign, said the restrictions on contact with the company imposed by French magistrates made his position untenable.
The businessman, who denies fraud and other allegations that company funds were used to improve his home, will be replaced by Serge Tchuruk, the former chairman of Total, the oil group.
The board of Alcatel had been criticised for sticking by Mr Suard for so long, though the restrictions imposed on the businessman also came under fire. The board in April appointed the chairman of Societe Generale, Marc Vienot, as interim chairman with the responsibility of finding a replacement for Mr Suard.
Jean-Marie d'Huy, the investigating magistrate, is among a group of new legal officers whose aggressive use of pre-trial powers to expose corruption in government and big business has caused an outcry. Mr Suard, who has not been charged with any crime, was initially backed by his company's board. But Alcatel could ill afford a management crisis during a competitive period in the French telecommunications industry, which is evolving rapidly as a result of broad deregulation and privatisations.
Mr Suard said yesterday: "As I leave the chairmanship of this group, which ranks today among the world's top high technology companies, I hope those who contributed to its success will give the new chairman their full support."
Alcatel's earnings plunged 51 per cent to Fr3.62bn (pounds 476m) last year on sales of Fr168bn, according to profit figures announced yesterday.
The company reiterated that 1995 would be a difficult year for the group because of deregulation and rapid technological changes.
Its managing director, Francois Laage de Meux, said 1995 would be difficult for the telecommunications sector but restructuring and rationalisation efforts were expected to bear fruit this year or the next. He said the cable business was expected to show lower profit in 1995, partly due to interest costs.Reuse content