Lawrence Schembri's new role will see him join three other deputy governors, along with senior deputy governor Tiff Macklem and governor Mark Carney on the bank's governing council.
Schembri starts his new job Monday.
The position opened last October when Jean Boivin moved to the federal Finance Department to become an associate deputy minister.
Schembri was appointed adviser to Carney in 2010, with a focus on financial stability.
Toronto-born Schembri, who holds a PhD in economics, joined the bank in 1997 and was previously an associate professor of economics at Carleton University.
Carney will leave his post in June to become governor of the Bank of England. His replacement has not yet been named.