Major General Jamal Hakrush, from Kafr Kanna in northern Israel, joined the force in 1978 and has since climbed the ranks, all the way up to the force's second-highest rank.
Police announced he had taken up his post in a statement.
Arab Israelis, who include descendants of Palestinians who remained after the creation of Israel in 1948, say they face heavy discrimination, particularly related to jobs and housing.
They account for around 17.5 per cent of Israel's eight million population and are largely supportive of the Palestinians.