Air Marshal Mark Binskin will be Australia's next defence force chief.
Prime Minister Tony Abbott announced on Friday that Air Marshal Binskin, currently the force's vice-chief, would succeed General David Hurley, who steps down on July 4.
The new vice-chief will be Vice-Admiral Ray Griggs, currently the chief of navy.
He'll be replaced at the head of navy by current navy fleet commander Rear Admiral Tim Barrett.
RAAF chief Air Marshal Geoff Brown and army chief Lieutenant General David Morrison have had their terms extended for an extra 12 months.
Air Marshal Binskin said he came into the job at a time of transformation and continued reform - and was confident he would be able to meet those challenges head-on.
"We've got that new blood in ... plus we've got that experience and those wise hands as we continue this transition," he said.
General Hurley said the mixture of experience and new people would be particularly important in addressing cultural issues within the service.
"I think this team and this line-up gives everybody assurance that we are deadly serious about taking on that issue and driving it forward," he said.
He said Air Marshal Binskin had filled in for him so often that "sometimes I think he owns my seat already".
"He knows what he's taking on, so he doesn't go into this job being blindsided at all," General Hurley said.
Mr Abbott said General Hurley had served Queen and country with extraordinary distinction, while Defence Minister David Johnston thanked him for making it easy to settle in as a new minister.
The general said he wasn't going to "be a Nellie Melba" and one farewell was enough for him.
Mr Abbott also reaffirmed the coalition's promise to increase defence spending to two per cent of gross domestic product despite budget strains.
"We live in an uncertain and at times dangerous world," Mr Abbott said.
"We have to be ready for a wide range of contingencies in all sorts of different parts of the world."
He confirmed the federal government had a defence white paper process underway.