Product Owners - Which Function?

Hello,

In my company, Product Owners are part of the development function (just like engineers, QAs etc) and convert customer/product management requirements into artifacts a development team can work on.

There is a desire to move the PO function into Product Management. 

Does anyone have experience of working with PO's in the development function and product management? 

Any advantages/disadvantages with either approach?

Thanks in advance.