Ms Byanyima will take over from Malian Michel Sidibé who stepped down in May, following accusations of serious mismanagement.
She has been the Oxfam executive director for six years since her appointment in January 2013.
United Nations Secretary General Antonio Guterres has appointed Oxfam International executive director Winnie Byanyima as the new UNAids executive director, a spokesperson for Guterres said in a statement.
Ms Byanyima, a Ugandan, has held several roles affiliated to the governance of the African Union, and has influenced the international agenda at the United Nations through her leadership in many coalitions of civil society organisations.
She has been the Oxfam executive director for six years since her appointment in January 2013.
Ms Byanyima will take over from Malian Michel Sidibé who stepped down in May, following accusations of serious mismanagement. Mr Sidibé was also accused of creating "a patriarchal culture tolerating harassment and abuse of authority."
An Independent Expert Panel (IEP) report commissioned by UNAids governing body said the agency's culture under Sidibé also failed "to uphold the United Nations' laws and values."
Sidibe left UNAids after a decade-long tenure to become Mali's health minister.
Guterres continued to praise Mr Sidibé despite his being reprimanded for mishandling a sexual assault investigation involving one of his top deputies.
Mr Sidibé’s divisive era led Aids experts to voice concern over the future of the UN body.
In the statement announcing Ms Byanyima's appointment, Guterres said she "brings a wealth of experience and commitment in harnessing the power of government, multilateral agencies, the private sector and civil society to end the HIV and Aids crisis for communities around the world."
Ms Byanyima, 60, said she was "honoured" to be joining UNAids "at such a critical time in the response to HIV."
"An honour to be asked to lead the UN and global HIV response! I embrace the role with humility, passion and faith that we can end this pandemic by 2030. I look forward to joining
UNAids," she tweeted.
Aids-related illnesses have killed 35 million people since the first cases were reported more than 35 years ago.
