Cavanagh will oversee a budget of $323 million in her new role which begins on February 1 for five years.
Women's Affairs Minister Julie Anne Genter and State Services Minister Chris Hipkins welcomes the fact that for the first time, women made up half the number of chief executives.
"More women in leadership means better decision-making, better organisational resilience and better performance, " said Genter.
"It also opens up more opportunities for women to succeed and contributes to a more inclusive and fairer society."
Among the women in senior public sector roles are Carolyn Tremain at the Ministry of Business, Innovation and Employment; Iona Holsted at the Ministry of Education; Naomi Ferguson at Inland Revenue; Naomi Ferguson; and Debbie Power who is soon to take over at the Ministry of Social Development.
Andrew Crisp is currently acting chief executive at the Ministry of Housing and Urban Development, on secondment from Land Information.
He was previously deputy chief executive of the building, resources and markets division at the Ministry of Business Innovation and Employment.