The surprise decision by Mr Yea, 44, appears to leave the way clear for Paul Walsh, head of the group's Pillsbury Foods business, to win the prize, though Dennis Malamatinas, head of Burger King is also a candidate.
The winner will replace John McGrath, who will step down as Diageo's chief executive six months later than originally planned at the end of 2000.
Tony Greener will leave as chairman next July.
Commenting on his decision to quit, Mr Yea said: "I never saw the top job coming my way. But I do think I've got a top job in me so it is time to have a look.
"I'm 44 and I've spent six years as finance director of a plc, including the last two extraordinary years. It is all about timing."
Mr Yea will leave the board at the end of June but stay on in his pounds 382,000 role for several months to ensure an orderly succession.
He will be replaced by Nick Rose, currently finance director of UDV, Diageo's spirits division.
Mr Yea will not receive compensation for loss of office. However, he holds shares and options worth more than pounds 800,000.
Diageo denied that Mr Yea was leaving because he had been passed over for the top job. It said no decision had been taken and that nothing had been said to Mr Yea about the succession.
However, analysts disputed this. One said: "It certainly looks like he was passed over." But another said that now the merger between Guinness and Grand Metropolitan had been bedded down it was more important for Diageo to choose an operational manager rather than finance man.
Mr Yea is a highly regarded executive who was just 39 when he beat Gerald Corbett of Grand Metropolitan to become the new finance director of Diageo.
He has also worked in engineering, plastic packaging and fruit machines, and a FTSE 100 chief executive position is believed to be within his reach.
Nick Rose 42, Mr Yea's successor, is a former Grand Metropolitan financial controller who spent 11 years with Ford.
Mr Greener's retirement confirmation heightened speculation that a new chairman would be announced at Diageo's annual results in September or its annual general meeting in November. Lord Blyth, the Boots chairman and Robert Wilson of Rio Tinto are heavily tipped for the new non-executive chair.
"We are committed to a seamless transition to the future Diageo management team. As part of this process, John and I are separating our retirement dates by six months, to ensure stability and continuity throughout," Mr Greener said.
Diageo also announced yesterday that Peter Job, Reuters' chief executive, is stepping down as a non-executive director. Bill Shanahan of Colgate- Palmolive is joining the board.
Diageo shares closed 6p higher at 723.5p.