Air New Zealand's chairman John Palmer said Luxon brought a wealth of international business experience to the airline and an exceptionally strong commercial and customer focus.
"Christopher has world class strategic, commercial, leadership and stakeholder management capabilities proven across multiple markets," Palmer said.
Luxon said he felt "privileged" to be given the opportunity to lead the airline.
"Rob Fyfe has done an incredible job transforming Air New Zealand and steering it through some of the most difficult trading conditions in modern history. " he said.
Palmer said the board is delighted that it has been able to appoint an internal candidate.
"We conducted an exhaustive international search for a new Chief Executive Officer and it gives the Board great heart that the succession process it had in place furnished strong internal candidates leading to this appointment."
Other potential candidates from within the airline included the shorthaul airline boss Bruce Parton and chief financial officer Rob McDonald.
Luxon joined Air New Zealand in May 2011 from Unilever where he was president and CEO of Unilever Canada since December 2008.
In this role he was responsible for leading Unilever's US$1.4 billion business and 1500 employees in Canada. Christopher led Unilever Canada on a major change programme.
He holds a Master in Commerce majoring in Business Administration at Canterbury University.
Air NZ's international airline carries approximately 1.6 million long haul passengers annually, has annual revenue of approximately NZD$1.8 billion and employs more than 3,000 staff.
Luxon is married to his wife Amanda and they have two children William aged 12 and Olivia aged 10.
Shares of Air New Zealand, which is three-quarters owned by the government, last traded at 86.5 cents and have declined 21 per cent in the past 12 months.
It is rated 'outperform' based on the consensus of seven analyst recommendations compiled by Reuters.
The Government has flagged its holding in the airline as among assets it plans to sell down to just over 50 per cent.