Bronwyn Hill is currently director general, major projects and London, at the Department for Transport.
She will take up her new post on 28 March.
The move follows Helen Ghosh's move from Defra to become Permanent Secretary at the Home Office.
While at the DoT, Ms Hill was responsible for transport's contribution to the 2012 Olympics and for major projects to support economic growth.
Prior to that, she was responsible for funding and policy on local transport and Transport for London, with expenditure of £6bn a year.
Although these posts appear urban-focused, Ms Hill was regional director at the at the Government Office for the South West from 2005-2007
During this time, she was the lead regional director for Defra.
Ms Hill was awarded the CBE for services to transport in 2001 after a career involving work on European aviation issues, road safety and green transport.
Cabinet Secretary Gus O'Donnell said she brought a wealth of experience in government in complex and high profile policy areas.
"She is also an excellent leader, and her appointment will ensure that Defra is very capably led through the changes ahead."
Sir Gus thanked Peter Unwin for his work as acting permanent secretary since the beginning of 2011, guiding Defra through a transitional period.
Ms Hill said she was delighted to join a department that put the environment at the heart of everything it did.
"DEFRA has a vital role to play, both nationally and internationally, in actions to improve the quality of life for everyone in this country," she said.
"I look forward to leading the department in that work through the challenges ahead."