The post of CEA had been lying vacant since Arvind Subramanian left the finance ministry after a four-year stint earlier this year.
"The Appointments Committee of the Cabinet (ACC) has approved for the appointment of Dr Krishnamurthy Subramanian, Associate Prof. and ED (CAF), ISB, Hyderabad, to the post of Chief Economic Adviser," said a government notification.
His appointment will be for a period of three years, it said.
Subramanian holds a PhD degree from Chicago Booth.
(With inputs from agencies.)