Robert Rubin, one of the highest-profile executives at Citigroup (C), resigned from his role as a senior counselor at the New York-based bank that needed a massive government rescue last year.

Rubin, who joined Citi in 1999 after serving as Treasury secretary under President Clinton, resigned his post effective immediately. He will retain his position as director until Citi's annual meeting. Rubin has received heavy criticism over his role at the financial conglomerate that has lost $20 billion over the past year.

"This is not a decision that I have come to lightly," Rubin said in a statement. "But as I enter my 70s and with all that is now in place at Citi, I believe the time has come for me to make these changes."

In a letter sent to Citi CEO Vikram Pundit, Rubin wrote: "My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today." 

Citi's stock, which has lost roughly three-quarters of its value over the past 12 months, extended its losses when the news broke Friday afternoon. 

Pandit praised Rubin for his "invaluable contributions" to Citi since joining the bank nearly 10 years ago. "He has also been a trusted advisor to senior management as well as to me personally, and I am pleased to say Bob has agreed to continue to be available as a sounding board and resource for me and for the company," Pandit said in a statement. 

Rubin, who has received $115 million in pay, is "tired of it" and plans to focus on his non-profit work and other outside interests, The Wall Street Journal reported. 

The changes at the top of Citigroup come as reports swirled late Friday that the bank is in talks to unload Smith Barney, the prized brokerage and asset-management unit. Citi is reportedly in serious and advanced talks to unload a 51% stake in Smith Barney to Morgan Stanley (MS) and is said to be considering selling other assets. 

Rubin was intimately involved in the decision at Citigroup in late 2004 and early 2005 to take on greater risk to increase profits, the Journal reported. Given the collapse of the housing and credit markets, it's clear that that strategy did not go as planned. 

Last year, Citigroup received a huge lifeline from the U.S. government, which agreed to inject an additional $20 billion into the bank and backstop losses on most of a pool of $306 billion of toxic assets. As part of the Treasury's $700 billion Troubled Asset Relief Program, Citi also received a $25 billion injection. 

Rubin is also said to have been instrumental in the board's decision to hire Pandit to replace Charles Prince as chief executive in December 2007. 

Prior to his four-year stint at the helm of the Treasury Department, Rubin spent 26 years at Goldman Sachs (GS). 

Sir Win Bischoff, chairman of Citi's board of directors said: "On behalf of everyone at Citi, I am deeply grateful to Bob for his unwavering commitment to Citi over the past decade and for his personal friendship. We will miss him greatly and wish him well."