Economist Pan Gongsheng will take the place of outgoing central bank governor Yi Gang, the official Xinhua News Agency said.
Yi has headed the People's Bank of China (PBOC) since 2018 and has reached retirement age.
The decision, made by Chinese legislators at a meeting on Tuesday, comes after Pan was appointed the PBOC's Communist Party secretary on July 1.
Pan previously headed China's foreign exchange regulator, a position he had held since 2016, when China faced major capital flight.
The 60-year-old has also served as one of the central bank's vice-governors since 2012.
Pan, who attended top universities Cambridge in the United Kingdom and Harvard in the United States, is reputed to be deeply experienced in Chinese banking and politics, having also worked at two major state-owned banks.
"All these roles could have ended Pan's career if mishandled," analysts at Beijing-based consultancy Trivium wrote in a note.
"Instead, he built a reputation for being a politically savvy problem solver," the analysts said.
Neil Thomas, a China specialist at the Asia Society, said: "Pan Gongsheng is a financial technocrat, not a Xi loyalist."
"This suggests Xi is more concerned about China's economy than before the 20th Party Congress," Thomas tweeted, referring to a key conclave last year where Beijing's top leadership confirmed a third term in power for Xi.
The central bank has cut several interest rates in recent weeks in an effort to reinvigorate the economy, but a run of dismal economic data over recent months has ramped up calls for officials to unveil stronger support measures.
China said this month its economy grew 6.3 percent in the second quarter, much weaker than the 7.1 percent predicted in an AFP survey of analysts.
The disappointing result came despite a very low base of comparison with last year, when China was hit by a series of Covid lockdowns in major cities.
In quarter-on-quarter terms -- considered a more realistic basis for comparison -- growth came in at 0.8 percent, well down from the 2.2 percent seen in January-March, the first full period after the removal of zero-Covid restrictions.
Youth unemployment jumped to a record 21.3 percent in June, up from 20.8 percent in May.
China's Politburo said on Monday the economy was facing "new difficulties and challenges".
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