Kramer, who came to Stanford from New York University in 2004, will succeed Paul Brest at the Hewlett Foundation, located in Menlo Park.
Brest, who also was dean of Stanford Law School before joining Hewlett in 1999, announced last August that he would retire in 2012.
With assets of more than $7.2 billion, the Hewlett Foundation has made grants since 1967 to solve social and environmental problems. In 2011 it awarded $203 million in grants around the world in the areas of education, environment, global development and population, performing arts and advancing philanthropy. It also has a program to support disadvantaged communities in the Bay Area.
The foundation was established in 1966 by HP cofounder William Hewlett, his wife, Flora, and their eldest son, Walter. Flora Hewlett died in 1977 and William Hewlett in 2001. Walter Hewlett currently chairs the foundation board.
In his tenure at Stanford Law School, Kramer championed deeper integration between the law school and the broader university, changing the school's calendar from the semester to the quarter to allow law students to take classes in other schools and departments.
He also oversaw the dedication of major new law school buildings, including the Munger Graduate Residence and the William H. Neukom academic building.
"Larry Kramer transformed the Stanford Law School, both physically and programatically," Stanford Acting President and Provost John Etchemendy said.
"He pioneered a new vision of legal education and then oversaw the creation of a physical plant capable of supporting the new program. His vision has benefited not only law students but the university at large by integrating the law school with the rest of the university," Etchemendy said.
Under Kramer's leadership, the school also launched programs to give law students experience studying and working in a global setting and emphasized in its curriculum international business, trade and tax, and national security. International students now make up 15 percent of the upper-level student body.