O'Neill, 52 years old, took the post on March 26 after being appointed earlier this year. However, he never even made it to his desk, a spokesman for the bank said. O'Neill replaced Martin Taylor, who quit dramatically last year.

Barclays said O'Neill passed a medical examination conducted before a formal offer was made in February. However, it was later discovered that he had an arrhythmic heartbeat. Following further medical tests in London on Monday, O'Neill agreed with Barclays that the situation is serious and that he shouldn't accept his new appointment.

O'Neill had been the head of BankAmerica Corp.'s asset-management and investment operations. He is a former U.S. marine with a reputation among investors for creating shareholder value. He was to succeed Taylor, who resigned over strategic differences.

In February, investorsapplauded O'Neill's appointment. He joined the British bank after it shed several businesses. Had O'Neill stayed, he would have had to deal with Barclays's rising costs, and form a strategy for the bank amid the consolidation of Europe's financial-services industry. In addition, he would have had to determine the fate of Barclays Capital, the remnant of the group's foray intoinvestment banking that ran into trouble last year over its exposure to Russia and Long-Term Capital Management LP.

Peter Middleton will serve as group chief executive until a replacement is found.

In addition, he will become the bank's chairman when Andrew Buxton retires on April 23.