The change in management happened on Monday, exactly 27 years after Mr Bezos founded the company as an internet bookseller.
The 57-year-old has since overseen its growth into a global e-commerce giant that is one of the most valuable companies in the world.
Amazon’s annual profit almost doubled in 2020 to $21.3bn (£15.37bn) – partly down to the Covid-19 pandemic pushing shopping online.
The new chief executive, Mr Jassy, built an enormously profitable and market-leading business, Amazon Web Services, that runs data centres serving a wide range of corporate computing needs.
Amazon is also expanding further afield into Hollywood and healthcare.
Announcing he would be stepping down as chief executive from the company he founded out of a garage, Mr Bezos said he wanted to “focus [his] energies and attention on new products and early initiatives” in his new role of executive chair.
“This journey began some 27 years ago. Amazon was only an idea, and it had no name. The question I was asked most frequently at that time was, ‘What’s the internet?’ Blessedly, I haven’t had to explain that in a long while,” he wrote in a letter to Amazon employees earlier this year.
“Today, we employ 1.3 million talented, dedicated people, serve hundreds of millions of customers and businesses, and are widely recognised as one of the most successful companies in the world.”
Mr Bezos said he would “stay engaged in important Amazon initiatives” but also concentrate on projects away from the day-to-day running of the business in his new position.
He said the move would give him the “time and energy” needed to “focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post” and his “other passions”.
Mr Bezos said that he had “full confidence” in his replacement, Mr Jassy.
“Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence,” he said.