The Right Reverend Steven Croft will leave his role as the Bishop of Sheffield to take up his new position.
Dr Croft will be the most senior clergyman in the Church of England for Berkshire, Buckinghamshire and Oxfordshire.
The Diocese faced "an extended vacancy" after votes in May last year failed to produce a candidate.
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Downing Street announced Dr Croft's appointment on Tuesday.
He was ordained in 1987 and became the Bishop of Sheffield in 2009.
The Diocese of Oxford has been without a permanent bishop since the Right Rev John Pritchard stepped down in October 2014.
Interviews of potential candidates were held in 2015, but the Archbishop of Canterbury said the Crown Nominations Commission - which elects bishops - had "been unable to discern the candidate whom God is calling".
The Bishop of Dorchester, the Right Rev Colin Fletcher, acted as bishop of the diocese in lieu of a full-time post holder.
Dr Croft will tour the diocese on Tuesday. He will meet the Bishop of Reading and the Bishop of Buckingham.
A new Bishop of Oxford has been announced two years after the post became vacant.