Fonterra says John Wilson has been selected by the board to take over as chairman when Sir Henry van der Heyden steps down from the role in December.
The appointment will be put to members of the co-operative at its annual meeting, which has been set down for December 17.
Van der Heyden said Wilson, on the board since 2003, would bring "lengthy experience".
Wilson is a previous chairman of the co-operative's Shareholders Council. He lives on his family dairy farm near Te Awamutu and also manages a dairy farming business in South Canterbury.
He is chairman of South Auckland Independent Testing Society and a director of the listed produce company Turner and Growers.
"Over the past two years the board has been working through a considered and disciplined process to appoint a chairman-elect and ensure the succession plan we have is in the best interest of the co-operative," van der Heyden said.
He and Wilson would work together over the next few months to ensure a smooth transition.
Fonterra's last annual report says Wilson chairs the capital structure committee and serves on the appointments, remuneration and development committee, the milk price panel and the fair value share review committee.
In 2000 he was awarded the Nuffield Scholarship.
Willy Leferink, the chairman of Federated Farmers Dairy, said Wilson was "ably equipped" to step into van der Heyden's shoes.
Since Wilson's appointment to the board, Fonterra has gone from generating $11.8 billion in revenue to about $20 billion today.
Leferink said Federated Farmers "strongly hopes" Wilson would put in place a clear succession pathway by creating a deputy chairman.
"A lack of board succession is a strategic weakness given Fonterra is a team made up of farmers, staff, customers and suppliers," he said.
Wilson will be in charge of the world's fourth-largest dairy firm in the second decade of its life.
Van der Heyden, a key figure in the formation of the co-operative in 2001, has been chairman since 2002.
He has also been at the forefront of proposed changes for Fonterra's balance sheet, which are expected to culminate in the TAF share trading scheme in November.
Van der Heyden is also a director of Auckland International Airport, Independent Egg Producers, Elevation Capital Management, Pascaro Investments and Manuka. He is a member of Rabobank's Food Agribusiness Advisory Board of Australia, the New Zealand Business Forum and a director of Zespri International.
Ian Brown is the new Shareholders Council chairman and Philip Palmer is deputy. APNZBy Jamie Gray Email Jamie