Mr Hounsell will act as executive chairman while a search for a new CEO takes place and said he expected plenty of interest in the position.
He also backed the "New Myer" turnaround strategy announced almost three years ago and instead seemed to blame the retailer's ongoing sales slide and profit declines on Mr Umbers.
"The strategy is not under review," Mr Hounsell said.
"I think it is all about execution of strategy and that is what I will be looking at very clearly."
Mr Hounsell's commitment to the strategy, which includes store closures, a focus on popular brands and heavily discounted clearance floors, angered Mr Lew, who holds 10.8 per cent of Myer through his company Premier Investments.
Mr Lew slammed Mr Umbers' ouster as demonstrating "a total lack of judgement from the Myer board and a complete abdication of responsibility".
He accused Mr Hounsell of trying to acquit himself of his role in Myer's poor strategy and said he did not deserve to be appointed or paid as executive chairman.
"The business has lost all of its retail talent in the past two years, and there is no retail experience of any note on its failed board," he said.
"Any remaining doubt that Myer is in peril should now be removed from the minds of all of shareholders."
Mr Lew is seeking an extraordinary general meeting for shareholders to vote on board renewal.
Myer's shares rose one cent to 54.5 cents on Wednesday but remain near their all-time low, set after the February 9 profit warning detailing a first-half sales slump of 3.6 per cent.
CMC Markets chief market strategist Michael McCarthy said Mr Umbers sealed his fate when, announcing the most recent deterioration, the CEO appeared to have "no idea" of how to turn Myer's fortunes around.
"Myer is facing all sorts of threats - cyclical in terms of weaker consumer and structural in terms of increased competition - but they haven't done more than just fiddle at the edges," Mr McCarthy said.
"While Mr Umbers is a competent retailer, more is required for the role at this time."
Mr Umbers exits with a year's salary.
Mr Hounsell said he believed there would be plenty of interest in the CEO vacancy despite Mr Lew's attacks and the difficult trading environment.
"I think there will be people out there who will be incredibly energised by this opportunity," he said.