The Dean of Liverpool, the Very Reverend Justin Welby, is to be the next Bishop of Durham.
Dean Welby, 55, is expected to be installed at a service later this year.
The former bishop, Dr Tom Wright, announced last year that he was leaving the post.
Dean Welby, who studied at Durham University, described becoming bishop as a "huge privilege" but said it would be "challenging".
He said one of the reasons was the heritage of the diocese as well as being able to serve "one of the most exciting and vibrant parts of the country".
"Coming here means being part of a remarkable community grounded in history but always moving forwards," he said.
"Because of the heritage and the strength of the area, to be a good Bishop here is about as challenging as it gets."
'Fire, life and faith'
Dean Welby said he and his family lived in the area between 1989 and 1992 and one of his children was born in the area.
He has been Dean of Liverpool since 2007 and he said the two areas were similar in terms of the challenges they had faced but also their spirit.
He said: "This, like Liverpool where we have lived for three-and-a-half years, is a part of the country that has had a more than its fair share of hard times.
"Yet, also like Liverpool, it is full of fire and life and faith, and capable of attracting investment and energy from all over the world because of the qualities of its people and life here."
Bishop Mark Bryant, the Bishop of Jarrow, said he was delighted at the news.
He said: "Justin has always had a deep interest in and concern for the communities in which he has worked and I know that he will bring that to the North East."