It was initially announced that Hill would step down as chairman but remain as a non-executive director and president, however a date for this was not confirmed.
The lender is currently looking for a new chairperson to replace Hill.
Metro Bank said in a statement: “Mr Hill believes that the bank has now reached a size and scale where it is appropriate to appoint an independent chairperson.
“The board’s search for a new chairperson is progressing well. However, if this is not completed by the end of the year, the bank will appoint an existing independent non-executive director as interim chairperson.”
Sir Michael Snyder, senior independent director at Metro Bank said: “Vernon is the inspiration behind Metro Bank, the first high street bank to open in the UK in over 100 years.
“It is thanks to his vision and leadership that we have grown to 70 stores around the country, serving over 1.8m customer accounts and we’ve twice been ranked as the number one bank for overall quality of service for personal banking. The board shares Vernon’s view that Metro Bank has now reached a point where an independent chairperson is appropriate to oversee the next stage of our journey.”
The bank was founded in 2010 and has been the subject of controversy as earlier this year, it was under investigation by the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) for miscalculating its mortgage book risk.
Last week, its shares dropped to a record low after it shelved plans to raise £250m through a bond issue due to a lack of demand from investors.
Hill has been seen as a controversial figure at the bank for several years and has faced challenges to his position from shareholders, who questioned the use of his wife’s firm for company work.