Petrilli had been chairman and interim CEO since August, after the online financial services provider's abrupt ouster of former CEO Steven Freiberg.
E-Trade has been struggling to recover from bad housing investments. It also has lost business as individual consumers pulled money out of the stock market. Faced with less trading activity, E-Trade has focused on managing costs and reducing risk. In January, E-Trade named banking industry veteran Paul Idzik as its new CEO.
E-Trade will appoint Rodger A. Lawson, 66, as its new chairman, assuming he is re-elected during the annual shareholder meeting May 9.
Petrilli told the board he didn't want to stand for re-election. In a statement he said the decision represents his "other business and time commitments."
In addition to Petrilli, board member Ronald Fisher also will not stand for re-election to the board.
In January, E-Trade reported a wider-than-expected fourth-quarter loss as low trading volume and a one-time charge to retire debt cut into the online brokerage's results.
Shares of the company fell 4 cents to $11.27 in morning trading.