UPDATE 1-Altria says UST CEO Kessler to leave

* UST CEO to leave Altria at the end of June

* Altria says integration cost savings on track

* Altria shares fall 0.7 percent

CHICAGO, June 26 (Reuters) - Smokeless tobacco maker UST's top executive will leave Altria Group Inc (MO.N) at the end of June after working on integrating the business into Altria for the past five months.

Murray Kessler became a vice chairman of Altria when the Marlboro maker bought UST for $10.4 billion in early January. He also served as president and chief executive of UST, known for its Copenhagen and Skoal products.

Altria said that since the acquisition it has found another $50 million in cost savings. Altria is on track to deliver about $300 million in integration cost savings by 2011, Chairman and CEO Michael Szymanczyk said in a statement on Friday.

Dan Butler, president of U.S. Smokeless Tobacco Co, will now report to Altria's Craig Johnson, who will continue to serve as president of Philip Morris USA and oversee Altria's other tobacco businesses, the company said.

Since it bought UST, Altria has combined the sales forces from U.S. Smokeless and its cigarette business into one team. It has also relocated the smokeless tobacco company's headquarters to Richmond, Virginia, where Altria is based, from Stamford, Connecticut.

In morning New York Stock Exchange trade, Altria shares were off 11 cents or 0.7 percent to $16.43. (Reporting by Jessica Wohl, editing by Gerald E. McCormick)