Hillier will take up his new role from 1 August when he replaces Dame Deirdre Hutton who has held the position for the past 11 years.
Transport secretary Grant Shapps selected Hillier, who was head of the RAF from 2016 to 2019, for the CAA position following an open competition.
Grant Shapps said: “This is an extremely challenging time for the aviation industry, unlike anything we have faced, so the need for an inspiring and experienced leader is vital.
“I’m confident he will excel addressing the challenges presented by Covid-19. I am also excited to work with him and support the CAA’s new vision once the industry is back on its feet.”