Dilley is former Arup executive chairman and replaces Lord Chris Smith.
Environment secretary Elizabeth Truss said: "This is a vital role which carries major responsibilities. I am delighted to have confirmed Sir Philip Dilley as Chairman of the Environment Agency and I look forward to him bringing his leadership, experience and gravitas to the Board."
The Environment, Food and Rural Affairs Select Committee published a report approving the appointment of Dilley as the new chair of the Environment Agency.
The recruitment was carried out in accordance with the ‘Code of Practice for Ministerial Appointments to Public Bodies’ published by the Commissioner for Public Appointments.