Milan, Italy - Cardinal Angelo Scola, 69, will take over a post seen as one the most important in Europe.
Pope Benedict XVI prefers to nominate clergymen that he knows and considers his ideological allies to key posts, according to Vatican watchers.
Scola first met the pope in 1971, and was one of the top young theologians closely involved in the creation of the conservative Communion and Liberation movement in the 1970s.
The pope, widely considered a conservative ideologue, has long-supported the movement.
A staunch supporter of immigrants' rights, Scola's appointment may roil Italy's Northern League political party, which is a key ally of Italian Prime Minister Silvio Berlusconi and is known for anti-immigrant rhetoric.
The 77-year-old outgoing head of the Milan church, Cardinal Dionigi Tettamanzi, had passed retirement age.
Scola's appointment has prompted speculation that Vatican is set to name other loyalists to influential posts.
He has for several years been at the forefront of the Catholic Church's efforts to improve relations between Muslims and Catholics.
Scola has served as the head of the Venice church since 2002.