The 52-year-old Rachel Treweek is currently the Archdeacon of Hackney in the diocese of London. She will now become the new bishop of Gloucester.
It is understood she will also become the first female bishop to enter the House of Lords.
Treweek said she was "overjoyed" to be named the new Bishop of Gloucester.
Although two women have been appointed bishops by the church, Treweek is the first in charge of a diocese and the first female Lord Spiritual, making her the most senior female bishop.
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Treweek who became the third bishop said: "I am surprised and, I have to admit, even a little daunted by the prospect. I am immensely grateful for the opportunities this diocese has given me to grow in my ministry".
Treweek, whose husband, Guy, is also a priest, has been long admired for her work in a tough London borough.
Educated at Reading University, she was ordained as a deacon in 1994 and a priest in 1995.
The Church of England yesterday appointed Alison White as its second female bishop. She will replace the Rev Richard Frith. She will be consecrated at York Minster in July.
The Church's General Synod formally approved plans in November last year to ordain women bishops after years of male domination.