The chipmaking giant also appoints the head of its software business, Renee James, as president.
In addition, Intel appointed Renee James to the role of president. She previously served as the executive vice president overseeing Intel's software and services group.
Krzanich joined the Santa Clara, Calif., company in 1982 and has worked in many different technical areas since that time. He now runs the company's manufacturing operations and also oversees supply chain, human resources, and information technology operations following his appointment as chief operating officer in January of last year.
"After a thorough and deliberate selection process, the board of directors is delighted that Krzanich will lead Intel as we define and invent the next generation of technology that will shape the future of computing," Intel Chairman Andy Bryant said in a press release.
Krzanich was largely viewed as a frontrunner in the CEO search. Intel typically names its CEO successor as chief operating officer first, and the last person to hold that role was Otellini. However, Otellini's plans to retire surprised the board and came before it was ready to name a new chief executive. It considered both internal and external candidates for several months before choosing Krzanich.
As Intel's manufacturing prowess becomes even more vital to the company's success, Krzanich's expertise in the area is sure to benefit the company. However, he's not expected to veer far from Intel's current strategy despite hopes by some investors that Intel pick an outsider to help chart a new course.
Check out CNET's earlier predictions on people considered for Intel's CEO role.
Updated at 7 a.m. PT with additional background.