Richard Lambert, the outgoing head of the Confederation of British Industry, is to be replaced by the CBI's deputy director general, John Cridland in the New Year.
Mr Lambert has held the position of director general for five years and will be stepping down at the end of January.
There were reportedly 45 candidates for the job, which were soon cut to 18 and then to six.
Helen Alexander, President of the CBI, said, "With all eyes on the business community to lead our country's economic recovery, the role of CBI director general has never been more important.
"The nomination panel and I were looking for someone with an extraordinary mix of communication, influencing, intellectual and leadership skills.
"We wanted someone with a proven track record, a firm understanding of public policy and a passion for business. The candidate also needed a clear vision of how the CBI needs to work with the Government and wider society to achieve growth and economic stability.
"His motivation, energy and appetite for change meant that John Cridland was, without doubt, the best person for the job.
"As deputy director general, he has been Richard's right hand man and an invaluable chief operating officer. He has been instrumental in helping to shape business and public attitudes on issues ranging from the minimum wage and flexible working, to industrial relations and the environment.
Mr Cridland, said of his appointment, "I am absolutely delighted to have been chosen to lead the CBI at this critical time for business.
"There are many challenges ahead in getting the economy growing and no one thinks that securing the UK's economic future will be easy, but business people across the country are rolling up their sleeves and getting on with the job."