Lynch replaces Guy Elliott, who announced his retirement last year after more than 30 years with the company.
Elliott will remain on the board until the end of the year but Lynch will take over as CFO on April 18.
Lynch joined Rio’s board in September 2011 when he was chief executive of Transurban Group, a role he held for four years until last year.
He will become an executive director of Rio, as well as a member of the executive committee from tomorrow.
Melbourne-based Lynch will relocate to London and will have a base salary of 8 million pounds ($A11.8 million), plus incentives.
"Chris Lynch is an extremely high-calibre addition to our executive team with a strong pedigree of board, mining and financial experience, including at BHP Billiton where he was chief financial officer and ran the Carbon Steel Materials division and 20 years at Alcoa,” Rio CEO Sam Walsh said.
“We are fortunate to have appointed someone so well qualified to take over from Guy and I am grateful to Guy for remaining on the boards until the end of the year."
Lynch said he was looking forward to the challenge.
“This is a wonderful opportunity for me to join Sam's leadership team and work with him in refocusing the business on pursuing greater shareholder value,” he said.
Walsh also announced that he would streamline his executive committee by reducing the number of positions reporting to him from 11 to nine.
The vacant group executive strategy position will not be filled and strategy will continue to be part of the CFO portfolio.
Bret Clayton's role of group executive, business support and operations will be restructured and its responsibilities will transfer to other executive committee members from tomorrow, though Clayton has agreed to stay with Rio to assist with a range of activities including continuing to oversee Pacific Aluminium as it is prepared for divestment.
Rio shares closed 1.6% up to $A67.05.