As head of design, Engman has been responsible for overhauling the Swedish flat-pack giant, moving it away from its reputation of "doing cheap stuff", as he explained to Dezeen in an interview in 2015.
His successor has not yet been announced, but the company has hinted that a direct replacement may not be recruited following Engman's departure on 1 October.
"IKEA will continue to be explorative and curious but the exact organisation and setup is something that will be defined in the coming period," said Peter van der Poel, manager of IKEA Range & Supply, in a statement.
Engman, who is a judge for the Dezeen Awards, first worked for the Swedish furniture behemoth part-time during his schooldays and went on to hold a variety of positions there, including marketing manager for IKEA Retail in Sweden. He left the company in 2000 to set up an agency called Kollo, returning 12 years later to become head of design.
"I came back to IKEA in a time when we decided to become more transparent and open up for more and bigger collaborations, which has been very inspiring and I hope this has contributed to that even more people have found IKEA interesting and vital," said Engman in a statement.
Speaking to Dezeen after his departure was announced, he emphasised the fact that success at a company like IKEA requires bringing all employees on board.
"For me one of those things that I've put a lot of hours into is to find a common language for speaking about design," he said.
"I think that's a problem within big companies, or any company. There's the ones in the know and then there's the others. I don't think it should be like that actually, for just the chosen few. It should be for everyone if you want to make big changes."
In 2015, Engman told Dezeen how he spearheads teams of designers, engineers and communicators that work together in small teams at IKEA's 4,000 square metre open design studio to create 2,000 new products each year.
Asked what he would most miss about working at IKEA, Engman singled out his colleagues, as well as the trust to explore that was placed in him.
"I think what I will miss by not being at IKEA is the possibilities," he said. "You're given a lot of trust, or I was given a lot of trust, to try out different things and the possibilities on that scale is a big thing that I will miss. And then you will always miss the people. There's a lot of good people there."