CEO Louis Chenevert will succeed David as chairman of the company that makes Pratt & Whitney jet engines, Otis elevators, Sikorsky helicopters and other aerospace and building products.
"This is obviously a big deal day," David told reporters on a conference call.
David, who also this year settled a high-profile $50 million divorce case with his Swedish countess ex-wife, said he will remain as a consultant to the company and an adviser to Chenevert through next year. He said he will defer to Chenevert on what precisely he will do.
"He'll decide how I can best be helpful," David said.
Chenevert said he sees no changes in the near future.
"At this point in time, I don't see a need for any change," he said. "We already have implemented strong leadership."
His elevation to the top job ends a transition that began in 2006 when Chenevert, then president of Pratt & Whitney, was hand-picked by David as his successor. Chenevert was elected president and a board member in 2006 and was elected CEO in 2008.
David, 67, led United Technologies as CEO for 14 years until he retired from that post in April 2008.
Chenevert, 52, joined Pratt & Whitney in 1993 after establishing a reputation as a troubleshooter at General Motors Corp.
David said he is very proud of United Technologies' "giant global footprint" he helped establish during his tenure. Looking back, he said United Technologies' unsuccessful attempt to acquire Morristown, N.J.-based Honeywell in 2000 "would have changed the landscape."
United Technologies has capitalized on products in strong demand, from U.S. military equipment to elevators or heating and ventilating systems shipped to a booming China.
Since David took the helm in 1994, profit and revenue soared, with much of the success attributed to his hard-charging style. But with the start of the global recession last year, it has fallen to Chenevert to push through a large restructuring plan that will eliminate 11,600 jobs, or 5 percent of its global work force.
That won an endorsement from David on Wednesday.
"I'm impressed with the magnitude of the restructuring," he said.
Shares of United Technologies added $1.79, or 2.9 percent, to close at $63.76 before the announcement was made about the new leadership.