Cochrane (pictured) joined the bank in 1979 and has held the same role throughout his tenure.
His transition will begin on 1 April and he has agreed to work part time until the summer to support his successor through the handover.
Esther Dijkstra, director of strategic partnerships at Lloyds Banking Group, said: “It is with understandably mixed emotions that I’ve agreed a flexible basis for Douglas Cochrane, head of housing development to retire.
“Douglas has been with Lloyds Banking Group for over 40 years and his contributions to the house building market have been instrumental in making it a better industry for builders, mortgage lenders and the customer.
“His influence has reached far beyond Lloyds Banking Group and he will be missed across government, regulators, industry bodies, house builders and many others across our industry.”
Cochrane was instrumental in simplifying the Help to Buy remortgage process with Homes England and was appointed chairman of the UK Finance Scotland Mortgage Committee in 2018.
“On behalf of Lloyds Banking Group I would like to thank Douglas for all of his contributions,” Dijkstra added.