Rowghani announced the move in a tweet, saying, "Goodbye Twitter. It's been an amazing ride, and I will cherish the memories."
Twitter, in a regulatory filing, said Rowghani "will continue to be a Twitter employee and act as a strategic advisor to the CEO" and that the company would not hire a replacement.
"All of Mr. Rowghani's operating responsibilities will be assumed by other members of the Twitter management team."
The move comes amid market skepticism about Twitter's ability to boost its growth around the world and deliver profits.
"This is the third, and arguably the most surprising, of recent top management changes at Twitter," said Paul Ausick at 24/7 Wall Street,
"Former vice president of consumer product, Michael Sippey, took an advisory role in January, and Twitter's senior vice president of engineering, Chris Fry, stepped down a few weeks ago."
Ausick said Rowghani's sale of 300,000 shares of Twitter stock at profit of nearly USD 10 million "rubbed some of the company's staff the wrong way."
"The sale came at a time when the shares were already under pressure and dropping steadily. The company's founders and the CEO had pledged not to sell as a demonstration of confidence, but Rowghani took a different course."
The online news website Re/code, which reported on Rowghani's status yesterday, said the move was "a clear demotion" for Rowghani and part of a broader shakeup aimed at reviving growth at Twitter.
Shares in Twitter rose 4.5 per cent today to USD 37.16, but remain far from the level above USD 70 after the company's public offering last year.
In April, Twitter shares were hit hard by the company's quarterly report which showed only a modest gain in users, bringing the total to 255 million.