Ostin Expected to Step Down as Chairman of Warner Unit : Music: Revered record executive expected to announce today that he will leave when his contract expires, sources say.

In what will mark the end of an era, music industry titan Mo Ostin is expected to announce today that he will step down as chairman of Warner Bros. Records when his contract expires Jan. 1.

Ostin, who has run the Burbank-based label for three lucrative decades, will pass the baton to Lenny Waronker, his longtime sidekick and current company president, according to sources at Warner Bros. Records.

Representatives for Ostin and Warner Music Group, the recording unit of Time-Warner Inc., could not be reached for comment Sunday. However, members of the music industry were startled Sunday by the news.

“Mo Ostin is the single finest record executive in the world--a man with no peers in this industry,” said entertainment impresario David Geffen, who worked with Ostin for almost two decades. “He made that label the most successful on the planet. It’s impossible to imagine Warner Bros. Records without Mo Ostin running it. As his longtime friend, it saddens me to see him leave.”

Ostin’s resignation is the latest fallout in a major shake-up at Warner Music Group, the world’s largest recording organization that is home to such acts as Madonna, Metallica and Snoop Doggy Dogg.

Tensions have been high at Warner Music Group--which includes Warner Bros. Records, Elektra Entertainment and Atlantic--since a sweeping realignment of the Time-Warner music group was announced last month.

The shake-up was signaled July 11, when Warner Music Group Chairman Robert Morgado promoted former Atlantic chief Doug Morris to the top of its new Warner Music USA sector, anointing Morris as his No. 2 man in America. Under the restructuring plan, Ostin and all U.S. label heads are required to report directly to Morris, whose title is chief operating officer of Warner Music USA.

The move, insiders say, was orchestrated in part to hasten the departure of key figures at the conglomerate’s other two major music units. Indeed, former Elektra Chairman Bob Krasnow resigned the day after the restructuring plan was announced, citing his exclusion from the new corporate inner circle.

Sources have said that Ostin, arguably the most revered executive in the recording business, was also unhappy about the new chain of command and clashed with Warner top brass on several occasions in recent weeks.

Sources said Ostin has been resistant to suggestions that he streamline his label and name a successor. Two weeks ago, the New York-based Morris flew to Burbank unexpectedly and met behind closed doors with Ostin. Ostin traveled back to New York four days later to resolve the matter.

Although Ostin is to leave Warner Bros. Records on Jan. 1, he is expected to stay on as a consultant to Time Warner chief Gerald Levin.