Khosrowshahi will be at Uber's headquarters in San Francisco today for an "all-hands" gathering to meet workers at the embattled company.
"We are delighted to announce that Uber's Board has voted unanimously to appoint Dara Khosrowshahi to be our new CEO," Uber executives said in an email sent to employees late yesterday.
Khosrowshahi is credited with turning Expedia into a global travel services behemoth, winning admiration from employees along the way.
Kalanick was the driving force behind Uber, taking a spur-of-moment idea and turning it into the world's most valuable venture-funded tech startup.
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But his brash personality and freewheeling management style, which some argue set a problematic tone at the company, made him a liability as well as an asset to the global ridesharing giant.
He stepped down as chief executive in June.
Khosrowshahi was nine years old when he and his family immigrated to the United States on the eve of the Iranian Revolution, according to Uber.
"We're really fortunate to gain a leader with Dara's experience, talent and vision," Uber said in the message to employees.
Khosrowshahi will face challenges including conflicts with regulators and taxi operators, a cut-throat company culture, and board members feuding with investors over Kalanick.
Kalanick frequently recounts how the idea behind Uber was born, when he and a colleague were attending a technology conference in Paris in 2008 and failed to find a taxi on a cold night.
But the hard-charging style that helped Uber succeed also made Kalanick a target for critics.
He has borne responsibility for allegations of nasty workplace tactics and covert use of law enforcement-evading software.
Dents to Uber's image include a visit by executives to a South Korean escort-karaoke bar, an attempt to dig up dirt on journalists covering the company, and the mishandling of medical records from a woman raped in India after hailing an Uber ride.
The US Justice Department is investigating whether Uber broke American laws against bribing foreign officials to promote business interests, the company confirmed.
But despite the company's dented image, its financial engine still appears to be purring.
Earnings figures confirmed by AFP showed that adjusted net revenue was USD 1.75 billion in the second quarter, more than doubling from about USD 800 million in the same period in 2016.
Gross bookings at the service doubled as the number of trips climbed 150 per cent from a year earlier.
Meanwhile, Uber drivers have earned USD 50 million in tips since a gratuity option was added to the ride-sharing application in June.
Uber has also been investing in autonomous driving technology, and provoked a lawsuit from the former Google car unit now called Waymo that accused Uber of stealing trade secrets.