Gen. Lloyd Austin, who is currently Army vice chief of staff, will replace current Central Command chief Marine Corps Gen. James Mattis once the four-star Army general is confirmed by the Senate.
In a statement released on Thursday, Panetta praised Austin's leadership in bringing to a close the U.S. military's involvement in the country during his tenure as the top American officer in Iraq.
"Gen. Austin led our military efforts at a particularly important time, overseeing the drawdown of U.S. forces and equipment while simultaneously helping to ensure that hard-fought security gains were preserved and that Iraqis could secure and govern themselves," according to Panetta.
That level of leadership and experience gained in Iraq and throughout his career will pay divdends for American forces in "one of the most critical posts in the department," Panetta added.
The DOD chief also credited outgoing Central Command chief Mattis as "the most celebrated battlefield leaders and strategic military thinkers of our time."
Known as the "Warrior Monk" for his hard-nosed, no-nonsense leadership style, Mattis played a vital role in leading the Marine Corps's campaign in the al-Anbar province of Iraq, which was part of the infamous Sunni Triangle, during the most violent days of the Iraq war.
As commander of the 1st Marine Division in Iraq in 2004, then-Maj. Gen. Mattis was instrumental in leading combat operations during both major U.S. offensives in Fallujah, dubbed Operation Vigilant Resolve and Operation Phantom Fury.
After Iraq, Mattis was awarded his fourth star and went on to lead Joint Forces Command in Norfolk, Va., until 2010, when he was named to take over Central Command, replacing then-Gen. David Petraeus.