The council signed an agreement with Te Arawa in 2015 recognising a joint commitment to working together and enabling an iwi voice on council business.
Maori make up nearly 40 per cent of the district's population and Rotorua contributes significantly to the Bay of Plenty Maori asset base, which is worth $8.6 billion.
"The organisation has made significant progress under the guidance of Ngati Whakaue kaumatua, Monty Morrison," Mr Williams said. "The kaiwhakahaere - general manager Maori role shows a progression to integrating a Maori perspective in council policy development and planning, and embeds our commitment to working with Te Arawa."
Ms Rangi said she was excited about her appointment and said the council was treading new ground.
"I think the partnership between Te Arawa and council is ground-breaking in New Zealand. The partnership is an important step in developing economically and socially and that's exciting for council and the community. My role will be to bring council, Maori and the community together for the betterment of our district," she said.
Mr Morrison will continue in his kaitiaki Maori role and the new role will support that.
Mr Williams said Ms Rangi brought a wealth of experience to the new role.
"Ms Rangi understands how to support change through working with diverse stakeholders such as iwi, councils and government agencies. She will be a welcome addition to the council's executive and will inject a new and different perspective," he said.
A pohiri marking Ms Rangi's appointment will be held at the council on Monday, October 16 when she starts in her new role.