He also copped flak for his high salary, with news.com.au last year reporting he was paid over A$75 million ($80m) between 2012 and 2020.
Hudson will be the first woman to lead the airline.
Qantas chairman Richard Goyder said the appointment came after a rigorous selection process and allows for a smooth transition from Joyce.
The board had a number of high-quality candidates to consider, both internally and externally, he said.
“Vanessa has a deep understanding of this business after almost three decades in a range of roles both onshore and offshore, across commercial, customer and finance. She has a huge amount of airline experience and she’s an outstanding leader.”
For the past five years Hudson has had a direct hand in shaping Qantas strategy as a member of the group management committee.
“Her handling of the finance and treasury portfolio during the Covid crisis was outstanding,” said Goyder.
She also led the fleet selection process last year for the renewal of Qantas’ domestic jet aircraft over the next decade.
Hudson said it was “an absolute honour” to be asked to lead the national carrier.
“This is an exceptional company full of incredibly talented people and it’s very well positioned for the future. My focus will be delivering for those we rely on and who rely on us – our customers, our employees, our shareholders and the communities we serve.”
Goyder said paid tribute to Joyce’s leadership and said the transition was happening at a time when the group was extremely well positioned.
“We have a clear strategy, a strong balance sheet and record profitability that supports a pipeline of investment for customers, opportunities for our people and returns to shareholders.”
Joyce faced “more than his fair share of challenges” from the global financial crisis, to record oil prices, to intense competitive pressures and the Covid crisis.
“The company was restructured to deal with a number of external shocks and Alan led it to several record profits. He’s overseen a lot of investment in aircraft, lounges, the creation of Jetstar, our cornerstone partnership with Emirates and innovations like the Perth-London route and Project Sunrise.”
The airline will also fly non-stop from Auckland to New York from the middle of June.
Joyce said that at the board’s request, he extended his time as chief executive to see through the Covid recovery plan.
“So now that we’re on the other side of that crisis it’s a logical time for me to step down,” he said.
Hudson joined Qantas in 1994 and since she has held a variety of senior commercial, customer and finance roles across the group.
In these various roles her responsibilities ranged from sales channels, revenue management and network.
Hudson has a Bachelor of Business and lives in Sydney with her husband and two daughters.