Mr Sankey, who has been chief executive for seven years, will depart with immediate effect. He will be paid more than pounds 900,000 in compensation for loss of office, while his share options are worth an additional pounds 400,000. The group's shares rose 50.5p to 870p on the news. Michael Turrel, operations director, has been named as acting chief executive until a full -time successor can be found.
Analysts said the departure could leave the group vulnerable to a takeover, with Unigate, Colgate-Palmolive, and Procter & Gamble leading the field of potential bidders.
"Without a chief executive you become vulnerable to an approach," said Peter Cartwright at Williams de Broe.
Reckitt & Colman denied that Mr Sankey had left as a result of last November's profits warning, which was blamed on poor trading in Far East markets and de-stocking in America.
But it admitted that the warning had "resulted in the board sitting down and deciding where it wanted to go," a spokesman said. "The directors decided a different approach was needed."
Mr Sankey was responsible for a major re-structuring at Reckitt & Colman. He acquired the L&F household products division from Eastman Kodak in 1995 in a deal that included Lysol, the top brand cleaner and disinfectant. In turn he sold Colmans mustard and increasingly focused on emerging markets
Alan Dalby, chairman, said Mr Sankey had been vital to the company's growth.