HONG KONG, March 29 (Reuters) - A supervisory body of Hong Kong's central bank has decided to replace a unit of State Street Corp as manager of the territory's largest exchange-traded fund of more than $14 billion, the first such move since the vehicle was launched more than two decades ago.

State Street said in a statement on Tuesday that its unit, State Street Global Advisors (SSGA), which has been running the exchange-traded fund since 1999 will be removed. This follows a U-turn by SSGA last year over an investment decision linked to U.S. sanctions on Chinese firms.

State Street, which still remains the custodian of the fund, said Hang Seng Investment Management Ltd, a wholly-owned subsidiary of Hang Seng Bank, an affiliate of HSBC , has been selected as the new manager for the listed Tracker Fund.

Hang Seng Investment Management said in a separate statement that the appointment is subject to regulatory approvals and the transition is expected to be completed in the third quarter of 2022. (Reporting by Selena Li; Editing by Anshuman Daga and Emelia Sithole-Matarise)