Having joined the business in 2014, the company said Mr Sheffield's appointment was based on a "relatively short horizon".
He previously spent 31 years at Kier, including four as Chief Executive, before joining Laing O'Rourke.
In a statement, the company said: "In the period with Laing O'Rourke, Paul has concentrated on our strategy and value proposition and at the same time, he focussed his leadership team on the legacy projects, which have now been completed in the UK, and also on building a quality pipeline for the future.
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"The business plans to 2020 are now complete and our vision to 2025 is well advanced and will be ratified in April/May this year."
Chairman Ray O'Rourke said: "Paul and I feel that now is an appropriate time for him to step off and make way for others currently in the business with longer horizons."
Mr Sheffield added: "Laing O'Rourke's client base, technical capability and opportunity to excel across a broad range of major projects, puts the business in a lead position within our industry. Delivering for clients is at the core of the Laing O'Rourke business ethos. I know the leadership teams in place across the business will continue to ensure that clients' commitments are delivered with certainty."
(LM/MH)
