BP’s lengthy hunt for a new chairman ended today with the appointment of Carl-Henric Svanberg, the chief executive of Ericsson, the Swedish telecoms company, to replace Peter Sutherland.

BP, Britain's largest company by market value, said that Mr Svanberg, 57, will step down at Ericsson at the end of the year after a seven-year tenure and take up the role at BP on January 1.

Mr Svanberg will be based in London and although he will remain as a non-executive director of Ericsson, he will devote the majority of his time to BP business.

Tony Hayward, BP's chief executive, said: “Peter Sutherland has been an outstanding chairman, guiding the company through one of the most successful periods in its history. He will be a hard act to follow.

“But I am sure Carl-Henric will be a worthy successor. Our shared views on many aspects of global business give me great confidence that we will work very effectively together on the next phase of BP’s progress.”

Mr Svanberg is widely credited with overseeing a turnaround at Ericsson during which he pursued an aggressive cost cutting drive.

At BP, he will face a series of challenges including completing a restructuring effort initiated by Mr Hayward, dealing with encroaching carbon regulation in the US and Europe at a time of mounting global concern over climate change and restoring the group's position in Russia, where last year BP became embroiled in a fierce row over ownership of its joint venture, TNK-BP.

Mr Svanberg, who was paid a total of 20.4m Swedish kronors (£1.6 million) by Ericsson last year, will face pressure from investors to maintain the group's dividend at a time of relatively weak oil and gas prices while continuing to invest in BP's costly long-term exploration and production programme.

He will also help settle the debate over the future of BP's alternative energy business, which has been uncertain since the departure of Lord Browne, Mr Hayward's predecessor as chief executive. Some critics have attacked BP for failing to live up to its 'Beyond Petroleum' slogan.

Mr Svanberg, who will be the first chairman of BP who is neither British nor Irish and beat off stiff competition for the job from Paul Anderson, the American former chief executive of BHP Billiton, has a reputation for social and environmental advocacy.

He is a member of the external advisory board of the Earth Institute at New York's Columbia University, the sustainable development group - a title he shares with Bono, the Irish rock star and debt campaigner as well as Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change.

Mr Svanberg said that the BP role was a great privilege as well as "quite a challenge", adding: "I'm hugely excited about joining the energy industry which is so much at the heart of the global economy. I look forward to it with relish."

The announcement brings to an end a search which began well over a year ago led by Sir Ian Prosser, BP’s deputy chairman, alongside Anna Mann, the City headhunter.

BP’s preferred initial candidate, Paul Skinner, the chairman of Rio Tinto, had to pull out of the race earlier this year after a rift with the mining group’s shareholders over a controversial tie-up with Chinalco, a Chinese state-controlled manufacturer of aluminium.

Mr Svanberg, who is also stepping down as the chairman of Sony Ericsson, said: “BP is a recognised world leader in the energy sector and it’s a great privilege to be invited to lead its board. Following such a distinguished predecessor is quite a challenge but I’m hugely excited about joining the energy industry which is so much at the heart of the global economy.”

Shares in BP have fallen 17 per cent over the past year, partly tracking the drop in oil from the record high of $147 glanced last July.

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