Wilson will chair the commission's board of directors.
Health Minister Rona Ambrose says Wilson has a strong personal commitment to mental health issues which will serve the commission well.
Wilson, 77, was first elected to the House of Commons in 1979 and served in cabinet under both Joe Clark and Brian Mulroney before being made ambassador.
His efforts in the mental health field include the establishment of the Cameron Parker Holocombe Wilson Chair in depression studies at the University of Toronto.
He has also been involved in Brain Canada, the Centre for Addiction and Mental Health and the Canadian Cancer Society.
"His appointment to this important role is a testament to his exceptional skills and distinguished career in the private and public sectors,"Ambrose said in a statement.
Ambrose thanked outgoing chairman David Goldbloom for his work with the commission.
"Under his leadership, the commission made significant progress in advancing mental health awareness and action," she said.
The commission was created by the Harper government in 2007 to promote mental health and work for the prevention of mental illness.Suggest a correction