GE also said it will take a non-cash goodwill impairment charge of "substantially all" of GE Power's current goodwill balance of about $23 billion.
On Monday, the firm said it expected to write down $23bn in impairment charges on its power division.
In addition to announcing the executive shakeup, GE also said on Monday that its power business has been performing worse than anticipated and will not hit its 2018 cash flow and earnings guidance.
GE's stock rose more than 10 percent on news of Flannery's surprise departure.
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Larry Culp, who becomes chairman and chief executive, oversaw a dramatic recovery at Danaher, another large manufacturer, while Tom Horton, who joins as senior director, restored the fortunes of American Airlines.
Flannery replaced Welch successor Immelt, himself pushed out earlier than expected last summer after nearly 16 years at the top. The company has been forced to sell off divisions and lay off employees, a process that accelerated under Flannery.
Flannery vowed to give GE more of a high-tech and industrial focus by honing in on aviation, power and renewable energy - businesses with big growth potential. To pay off debt and jump-start the stock, GE is selling off countless businesses, including its century-old railroad division, Thomas Edison's light-bulb unit, Baker Hughes and the health-care unit that makes MRI machines.
Once the last original member of the Dow, GE was removed from the index this summer.
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Culp, 55, ran Danaher from 2000 to 2014 in what investors and analysts view as one of the best turnarounds among multi-business industrial companies.
"With Larry what GE shareholders get is an outsider who will likely strip corporate back to necessary functions and tear down all the fiefdoms that prior management (Immelt) had built up", he wrote.
"We will have to see the magnitude of Power profit reset to quantify the risk of a capital raise but note that elimination of dividend frees up $4 billion/year". We remain committed to strengthening the balance sheet including deleveraging. "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency", Culp said.
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