The labor chief had accused Diess of betraying workers and trying to use the emissions scandal as a pretext for pushing through job cuts.
Board chairman Hans Dieter Poetsch said the departing Mr Mueller had done "outstanding work" at a time when the company "faced the greatest challenge in its history". "For that, he is due the thanks of the entire company".
VW will tighten leadership duties within the group and empower the heads of the three vehicle categories to take on company-wide responsibilities.
Will Ferrell rushed to hospital after SUV flips over in auto crash
He was on the way back from a " Funny or Die " event in San Diago. "Thoughts and good wishes to Will Ferrell , I hope he's okay". The two-vehicle crash occurred just south of Alicia Parkway about 10:55 p.m., Orange County Fire Authority Larry Kurtz said.
The carmaker said it will create six new business areas and a special portfolio for China, its largest market.
"Bundling brands in groups greatly helps to increase synergies", said Bankhaus Metzler analyst Juergen Pieper.
"Bringing Herbert Diess' CEO nomination forward is the next step in transforming VW into a more modern and effective company", Evercore ISI analyst Arndt Ellinghorst said in a note.
WNBA Draft: Minnesota's Carlie Wagner drafted by Minnesota Lynx with final pick
Lindsay Whalen has developed into a Minnesota basketball legend of sorts over the past two decades - and deservingly so. At least on paper, she can make the schedules work: The Lynx open May 20 and the season can't go beyond mid-September.
Mr Mueller, a former boss at Porsche, took over as VW CEO unexpectedly in September 2015 after Martin Winterkorn resigned over the scandal. "In a phase of profound upheaval in the automotive industry, it is vital for Volkswagen to pick up speed and make an unmistakable mark in e-mobility, the digitalization of the automobile and transportation as well as new mobility services".
The carmaker remains mired in legal woes overseas and in its home market, where it also faces possible diesel bans in some smog-clogged inner cities, a prospect that has already depressed resale prices to the chagrin of millions of owners of diesel vehicles.
The VW cars with 2-liter diesels would meet emissions standards tests in a laboratory or testing station, but in normal operation, they emit nitrogen oxides at up to 40 times the standard, according to the EPA. The automaker has replaced him on an interim basis with brand purchasing head Ralf Brandstaetter.
As part of the reorganization, the Volkswagen Group has announced that Audi CEO Rupert Stadler will head Group Sales, while Porsche CEO has been appointed to the Group Board of Management and will oversee the Group production.
Reliance Jio in talks with Qualcomm to launch laptops with cellular connectivity
Globally, Qualcomm is already working with players such as HP, Asus and Lenovo for the so-called " Always Connected PCs ". Qualcomm is closely associated with Reliance Jio and Retail, for its business of 4G feature phone .