The company aims to hold the world's largest portfolio of renewable hydrogen (GH2), green ammonia, green iron ore, green iron and other green product developments.
FMG said Gaines would assist with the global search for a new CEO to lead the development of the diversified renewables and resources group.
Global executive search firm Egon Zehnder has been appointed to "identify a CEO and other leaders with exceptional skills and global experience across heavy industry, manufacturing, and renewable energy".
"The search with Elizabeth, for a CEO and an even deeper management bench, is an enormous opportunity for a talented and visionary executive team, to continue the successful leadership of Fortescue, as we deliver on our strategy to diversify Fortescue to a renewable energy and resources company," FMG founder and chairman Andrew Forrest said.
"Fortescue Future Industries (FFI) is making enormous progress and will support the decarbonisation of Fortescue through the innovation and technological development of a green fleet and the supply of green energy.
"We are undergoing a significant transition, and I am delighted that with Elizabeth, the board is united in its vision and enthusiasm for the opportunity this presents."
FMG has accelerated its green initiatives this year and just this week, subsidiary FFI signed hydrogen-related deals with indigenous nations in Canada, the North Kalimantan provincial government and AGL Energy.
Gaines first joined the board of FMG in 2013 as its first female director, and became chief financial officer in 2017.
She was appointed as CEO later in 2017 and formally took over from Nev Power in February 2018.
Gaines will remain a non-executive director of FMG and has accepted the board's invitation to become the company's global green hydrogen brand ambassador.
"Elizabeth is one of Australia's truly inspiring leaders. We are grateful that she has accepted the critical role of ensuring the world understands that green hydrogen, green ammonia, green energy and all its products, are combined, the only practical implementable solution to global warming that can be delivered on a commercial, highly sustainable basis," Forrest said.
"Elizabeth's depth of character, leadership, global integrity and respect is appreciated by Fortescue's executives and fellow directors.
"With the new CEO our team will continue to empower Fortescue's leadership of a commercial solution to global warming."
Gaines said it had been an honour to lead FMG and contribute to the search for her successor.
"I know that the successful candidate will be able to build on our excellent operational performance and lead the diversification of Fortescue from a pure play iron ore producer to a renewable energy and resources company," she said.
Gaines said she was excited to play a role in FMG's goal to achieve carbon neutrality for scope 1 and 2 emissions by 2030.
"At the heart of Fortescue is its people and our unique culture and values," she said.
"Our commitment to operational excellence and our leading ESG credentials is second to none. I look forward to continuing to work with the talented team across the business as we grow and diversify.
"My heartfelt thanks to everyone at Fortescue for their support of me during my time as CEO and I look forward to ensuring a successful handover to the board's appointed successor and continuing as CEO until I subsequently transition to the non-executive director role."
