The swearing-in ceremony of 45-year-old Dhami will be held on March 23.
The BJP's dilemma on the choice of a chief minister for Uttarakhand was caused by Dhami's loss in Khatima, a seat he had been winning since the 2012 Assembly polls.
Party's central observer and Defence Minister Rajnath Singh announced Dhami's name after a brief meeting of the BJP legislative party here.
The meeting was attended by Union ministers Meenakshi Lekhi and Prahlad Joshi. While Lekhi was present there as a central observer, Joshi was the party's poll incharge for the state.
Making the announcement soon after the meeting at the party office here, Singh said he congratulates Dhami on being elected as the leader of the BJP legislative party.
The BJP has reposed faith in Dhami once again for the post of the chief minister as he knows well how to run a government, the defence minister said.
More From This Section
There was no name other than Dhami and all MLAs unanimously supported him, he said.
Soon after being elected the leader of the BJP legislative party, Dhami thanked people of the state for voting the BJP to power for a second consecutive term.
"The state's development will be given a fillip and Prime Minister Narendra Modi's grand vision for the development of Uttarakhand will be turned into a reality," he said.
Uttarakhand will be made a leading state over the next 10 years, he said.
The BJP had won 47 of the 70 seats in the Assembly polls, the results of which were announced on March 10.