Tannas, who is president and CEO of Western Financial Group, finished second in Alberta's senate elections conducted during last April's provincial election.
“When Albertans chose Scott Tannas as their Senate nominee during last year’s provincial election, they chose a person with great moral character, a finely-tuned business acumen and strong values," said Premier Alison Redford in a release.
“We are extremely pleased that the prime minister followed the wishes of Albertans and recognized these characteristics in appointing a very fine Albertan and Canadian to the Upper House."
Redford said Alberta has long been a proponent of an elected senate, and began electing senate nominees in 1989.
Doug Black, a Calgary lawyer and the chairman of the University of Calgary's board of governors, received the most votes in the last election for nominees to be senators-in-waiting.
He was appointed to the Senate in January to replace Liberal Joyce Fairbairn, who retired early for health reasons.
A 'remarkable Canadian'
A statement from the Prime Minister's Office Monday announcing the appointment said Tannas supports the Conservative government's reform plans for the Senate, including legislation to limit term lengths for senators and encouraging provinces to hold elections to nominate future appointees.
A bill to accomplish those goals is stalled at second reading and hasn't been debated in the House of Commons since February 2012.
In the statement from the PMO, Harper called Tannas a "remarkable Canadian."
"His strong business background and deep knowledge of Alberta are sure to benefit the Senate," Harper said.
"Our government welcomes the fact that Mr. Tannas was selected by the people of Alberta to represent them in the Upper House."
Calgary political scientist Duane Bratt says the prime minister has followed through on appointing senators who are elected in Alberta, but said it raises an interesting question.
"It's been easy so far for him because they've all been PCers out of Alberta that have been elected. What will happen if, let's say, Saskatchewan does it and the NDP win. Does he make the same commitment to appoint," he asked.
Harper also gave his thanks to Bert Brown, who was appointed in 2007, for his work on Senate reform and on behalf of Albertans.
Redford said Brown championed the democratic selection of senate nominees for decades.
“Senator Brown’s appointment in 2007 was followed by outstanding representation of our interests in the Upper Chamber, and we wish him all the best in his retirement,” she said.