Butler, who is currently the executive director of the international banks directorate at the Prudential Regulation Authority, will take up the post on 1 September and be with the FCA for a year.
Butler replaces Tracey McDermott who was appointed as acting CEO of the FCA following the resignation of current CEO, Martin Wheatley.
A barrister by training, Butler joined the Bank of England in April 2013 from the Financial Services Authority where she was head of the supervision department, a role she took up in 2008.
She joined the FSA in 2000 as chief counsel for markets, before becoming head of enforcement law and policy, a post she held until she moved into supervision.
