Microsoft is replacing Andy Lees as head of the company’s mobile division, according to a report yesterday from The Wall Street Journal’s All Things Digital blog. Lees led the effort to rebuild the company’s Windows Phone software into what is now Windows Phone 7 (WP7)

Microsoft CEO Steve Ballmer said in an internal memo published by The Seattle Times that he is moving Lees to a new role, where he will be focused on “driving maximum impact in 2012 with Windows Phone and Windows 8.”

Ballmer said Terry Myerson, the existing engineering vice president of Windows Phone and a long-time member of the Microsoft Exchange team, will assume Lee’s responsibilities. Myerson will now be responsible for Windows Phone development, marketing and other business functions.

The changes will go into effect immediately.

The move comes as Microsoft is just seeing the results of its partnership with Nokia come to fruition. Nokia’s Lumia series of WP7 smartphones was recently released in Europe, with a possible partnership with T-Mobile USA rumored to be announced this week that would bring the phones to the United States.

Microsoft’s former smartphone operating system, Windows Mobile, peaked at 50 percent of smartphone sales in the second quarter of 2007, according to NPD Group. By contrast, WP7 has failed to achieve more than 2 percent of total smartphone sales since its launch in the fourth quarter of 2010.