Masuko will retain his role as chairman of the board, Mitsubishi Motors said in a statement, adding that Masuko and Kato will hold a press conference on May 20 to discuss the changes.
Japan's sixth-largest automaker, in which Nissan Motor Co holds a controlling stake, said this month it expects profit to fall to 90.0 billion yen ($821 million) in the year to March as it navigates slowing demand for cars, global trade frictions and the need to develop new technologies.
Mitsubishi's partners Nissan and France's Renault are meanwhile grappling with the fallout from the arrest of Carlos Ghosn, the group's former chairman, who is facing charges of financial misconduct in Japan.
Ghosn has denied all charges against him.
Reporting by Stanley White.