Foreign Minister Bob Carr said the decision to install Margaret Twomey from February was in recognition of the Pacific nation's move towards democracy.
"There is a long way to go, but recent steps forward deserve the recognition agreed upon in our talks in July," he said, referring to the discussions that led to an agreement to restore full diplomatic relations.
"Australia will continue to encourage Fiji's return to democracy and the civilianisation of government positions."
Relations have been turbulent since Australia and New Zealand expelled Fiji's envoys in November 2009, a day after Suva ordered their high commissioners out, claiming interference in its judicial affairs.
Canberra and Wellington have led condemnation of Fiji military leader Voreqe Bainimarama since he seized power from the elected government in December 2006 in the country's fourth coup in two decades.
Bainimarama took control pledging to root out corruption and introduce a one-person, one-vote system intended to end entrenched racial inequalities in the nation of 860,000 but reneged on a promise to hold elections in 2009.
Instead, he tore up the constitution and introduced emergency laws which muzzled the media and banned public meetings.
Australia and New Zealand, major aid donors, responded by successfully pushing for Fiji's suspension from the Commonwealth and the Pacific Islands Forum.
But since January, the military government has gradually relaxed some of its emergency powers and announced plans to finalise a constitution ahead of elections in 2014.
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