The announcement shocked observers on both sides of the pond, particularly as Carney previously dismissed reports he was being courted, as he also played down rumours about joining the International Monetary Fund and the Liberal Party.
But the Bank of England rumours turned out to have substance, despite his earlier categorical denials.
On Monday, he hedged that all his discussions had been "off process," and that he had not applied as "part of the formal process." The discussions intensified in the last two weeks, he added, and "changed my view."
Still, British media were caught as unaware as those in Canada. "Stunned City welcomes new Bank chief," the Times of London blared.
Carney insisted he was not leaving Canada in the lurch for the big job — at a time when the economy remains stuck in the slow lane and household debt is at record levels, in part due to his low-interest rate policies.
"We have a system that works very well. It's been tested under the biggest economic and financial shock we'll ever see in our lifetime and it has passed that test," he told reporters.
"I'm going to where the challenges are greatest because I'm confident that the strengths are as deep and as broad as they are here in Canada. I could not do it any other way."
Canadian economists agreed, saying that while Carney had been a good governor, his actions were in line with the tradition at the bank.
"It's a feather in the cap for Mark Carney, but it probably doesn't mean too much for monetary policy in Canada," said CIBC chief economist Avery Shenfeld. "I think he's done a good job executing on the Bank of Canada's well-established methodology, which is raise rates only when inflation is a threat."
Still, Finance Minister Jim Flaherty described Carney's pending departure as "bittersweet" and "our loss."
The appointment takes place next July, but Carney, 47, will leave the Canadian bank on June 1, about 18 months before his full seven-year term was due to expire.
Appointed Feb. 1, 2008, Carney's legacy will have been to help steer the Canadian economy through the 2008-09 recession, revamping the management of the institution and introducing what the central bank called the most sophisticated plastic currency in the world.
But as he admitted, he also inherited a stable financial system and sound regulatory framework. Carney appeared to work well with Flaherty, who hand-picked him for the job over more seasoned candidates and on Monday called him his "friend."
Where Carney shone bright was on the world stage, particularly at meetings with his counterparts at the G7 and G20, where his voice appeared to carry more weight than might otherwise be the case coming from a relatively small country like Canada.
Time magazine named him one of the most influential policy-makers in the world and his name began surfacing whenever any big international job became vacant. Last year, he was given the responsibility of overseeing global financial reforms as head of the Financial Stability Board after his now famous quarrel with Wall Street financier Jamie Dimon of JPMorgan Chase over the need for stiffer regulation.
Royal Bank chief economist Craig Wright said Carney loves a good argument, and comes well armed.
"He's scary smart ... he's the real deal. He has an idea and he'll express it to you. If you push back he'll go a bit deeper and if you push back, he can be running a model in front of you in a minute," he said.
British Chancellor George Osborne simply called him the "outstanding central banker of his generation."
Carney's duties and challenges at the Bank of England will dwarf anything he faced in Ottawa. Much like in the U.S., the British financial system collapsed in 2008, requiring massive government bailouts. The economy is barely out of recession.
He also arrives in London with more of a free hand than he enjoyed in Ottawa, or was available to his predecessor, Mervyn King.
The British central bank will continue to set monetary policy, as does the Bank of Canada, but now it is also responsible for overseeing the financial system and regulating banks, and ensuring financial reforms are implemented. Carney will also remain as head of the Swiss-based FSB, overseeing the global system.
Carney said he was "honoured" to have been given such trust.
"This is a major challenge, a major opportunity. It is very important for the global economy that the U.K. does well, that it succeeds in this rebalancing of their economy, that the reform of the British financial system is completed, it's very important for Canada that the European transition comes to fruition. I will play a role there," he said.
IHS Global Insight chief U.K. and European economist Howard Archer called the appointment "unprecedented" because Carney is an outsider. But in the end, that may have been Carney's trump card.
"The appointment of Mr. Carney likely reflects the view that it is a good time to have a complete new broom ... and that this is easier to achieve with a complete outsider," he said.
Carney chose to highlight his connections to England, dating back to the decade he spent in London with Goldman Sachs.
"My wife is a British and Canadian national ... I know a lot of people in the city, in the industry in the United Kingdom," he explained. "Obviously, I think I can play a constructive role in relaunching this institution with its new responsibilities."
Osborne said he will take out British citizenship.
With Carney's leaving, senior deputy governor Tiff Macklem, 51, who Carney recruited from the Finance Department much as he had been earlier, becomes the front-runner to succeed him in June.Suggest a correction