Mahajan, who has already joined Mitie, will assume the position of chief financial officer and be appointed to the board on 10 February.
He joins Mitie from Balfour Beatty, where he was group director of finance from November 2013 until September 2016. He previously held other roles in project and structured finance in the successful investments division from 2005 to 2013.
Mahajan, who is an ICAEW member, also previously worked at EY and British Airways.
Baxter will provide ongoing support to the board and Mahajan to ensure an effective transition of responsibilities as Mitie approaches its year-end.
Roger Matthews, chairman of Mitie, said, "I would like to thank Suzanne for the significant contribution she has made to Mitie over the past 11 years.
"Since her appointment as group finance director in 2006 she has been a key architect of the successful growth throughout this period and in transforming the capability of the FM business to be a market leader in the UK. On behalf of the board, I wish Suzanne every success for the future."
Phil Bentley, CEO of Mitie, added, "I would like to offer my thanks to Suzanne for her support during the transition, and I wish her the best for the future. I am delighted that Sandip is joining Mitie. He brings a wealth of experience in financing and in improving the operational performance of long-term contracts. I am sure he will make a significant contribution to Mitie and I look forward to working with him."
Bentley took over as chief executive of Mitie late last year after Ruby McGregor-Smith stepped down.
McGregor-Smith, who trained to be an accountant at BDO from 1985 to 1991, has been a director of Mitie since December 2002 and has served as chief executive since April 2007.
She won the 2015 ICAEW Outstanding Achievement Award for her exceptional contribution to business and diversity initiatives.