ICI chief executive Brendan O'Neill has stood down with immediate effect.
Dr McAdam is a former chairman of Quest
The UK's biggest chemical maker has named John McAdam, currently head of ICI Paints, as its new CEO.
Last month, £700m was wiped off ICI shares after it said profits would be much lower than expected.
The company blamed problems at its Quest food flavouring and National Starch businesses.
It also said rising oil prices could result in higher production costs and warned of further job cuts.
Mr O'Neill, who joined ICI in 1998, agreed to resign on Tuesday evening following a meeting with the company's board.
He is likely to pick up around £615,000 in compensation, although the details of his severance package have yet to be confirmed.
ICI employs 5,500 staff at factories including at Slough, Middlesbrough and High Wycombe.
It has not said where any jobs cuts will fall.
An ICI spokesman said last month's profit warning was a "significant factor" in Mr O'Neill's decision to leave.
He joined the company from Guinness, becoming chief operating officer before stepping up to the role of chief executive in 1999.
Dr McAdam is former chairman and chief executive of Quest, in the Netherlands, and is a non-executive director of Severn Trent water.
ICI chairman Lord Trotman said: "In consultation with the board, Brendan has agreed that in the best interests of the company he should step aside.
"I wish to thank him for his unstinting efforts since he joined ICI in 1998."
One of Dr McAdam's first tasks will be to continue the group-wide cost-reduction review announced with the profits warning last month.
He said: "This is a great company, with strong market positions and considerable potential."
ICI shares, which have more than halved in value this year, rose more than 5% in early trading to 109.75p following Wednesday's announcement.