Martel was president of Bombardier's business aircraft division and left that post May 18.
Quebec Energy Minister Pierre Arcand made the announcement on Wednesday and said Martel's arrival coincides with the renewal of Hydro-Quebec's strategic plan.
Martel left the company during a difficult period for the aerospace giant, which recently announced the layoff of thousands of workers in his division.
He is replacing Thierry Vandal, who left the utility in January after 10 years as president and CEO.
Martel's mandate starts July 6.