Dhanani (41), who belongs to the Patidar community, won from Amreli constituency in Saurashtra for the third time, and was a front-runner for the post.
Patidar quota agitation leader Hardik Patel too had supported him for the post.
"A young, dynamic leader has been chosen by the party high command as the Leader of Opposition. He will take all Congress MLAs along and make the party stronger in the Assembly," state Congress president Bharatsinh Solanki said.
"He is young, has experience as an MLA, and is committed to the party," said Congress's Gujarat in-charge Ashok Gehlot, who announced Dhanani's name for the post after getting a nod from Congress president Rahul Gandhi.
Also Read
"The decision has not been taken on the basis of caste or religion. He has been chosen after MLAs gave their opinions," Gehlot said.
Dhanani has also served as vice president of National Students Union of India, the party's student wing.
The CLP leader would become the Leader of Opposition by default as the Congress, with 77 MLAs in the 182-member Assembly, is the largest opposition party.
Senior state Congress leaders Shaktisinh Gohil, Arjun Modhwadiya and Siddharth Patel were out of contention after losing the Assembly election.
Dhanani will replace 73-year-old Mohansinh Rathwa, a tribal leader who has won Assembly election for the tenth time now. Rathwa had been made the LoP ahead of the Assembly elections.
Dhanani is from Amreli, a farmer-dominated constituency where cotton is the main crop. With the prices of cotton dropping, Dhanani had effectively raised farmers' issues. He is considered to have played a key role in the party's performance in Saurashtra where the Congress won 30 out of 54 seats, nearly doubling its tally from 2012.
Disclaimer: No Business Standard Journalist was involved in creation of this content