Palm has announced that Jon Rubinstein will replace Ed Colligan as Palm’s CEO; Rubinstein is a former Apple exec who has been running Palm since two years ago under the title of executive chairman reports businessweek.

Colligan’s departure signals the final break from the old Palm; Colligan was one of the founders of Palm and made history developing the first true smartphone the Palm Treo.

The once dominant Palm has lost market to the likes of BlackBerry and the iPhone over the years and in 2007 Roger McNamee along with US’s Bono brought a 25 percent controlling interest, and has resulted in the launch of the Palm Pre. The word is Colligan is taking some time off and then will join Elevation Partners.