Mr Mercep, who will take up his new role in January, replaces former host Sean Plunket, who resigned in June.
He will work alongside long-time Morning Report host Geoff Robinson.
Radio New Zealand's communications manager, John Barr, said in September that more than 80 people had applied for the host position.
A source said that Mr Mercep would be given "extensive training" in the capital and would return to be based in Auckland next year.
Mr Barr said that Radio New Zealand had the capability to broadcast Morning Report from Auckland and had done so in the past, but declined to discuss options being considered for the Morning Report presentation.
Mr Mercep's appointment raises more questions about how how much longer Geoff Robinson will be in the job and whether the co-presenters are to be based at both locations.
Morning Report has a strong following in Wellington but has been trying to boost its profile in Auckland.
Mr Robinson has a 'softly softly' approach that countered Mr Plunket's punchy style. Mr Plunket's departure ended the successful double act. Mr Robinson and Mr Mercep have similar styles.
Having a presenter in Auckland will shore up the future of the Auckland newsroom, which Radio New Zealand bosses had suggested might be closed to meet budget restraints.
Mr Mercep, a journalist for nearly 30 years, joined Sunday in 2008 after spending seven years on Fair Go.
He has previously worked for ABC radio in Australia, for CBC radio in Canada and for BBC radio and television in the UK.
Mr Plunket resigned after a very public fallout with his employer over whether he was permitted to write a column for Metro magazine.
He is now one of the hosts of TV3's The Nation.
Rumours of Mr Mercep's appointment surfaced earlier this afternoon when TV3 reporter Laura Frykberg - who Fairfax Media report is the daughter of senior Radio NZ journalist Eric Frykberg - posted a message on her Twitter page that said: "Simon Mercep being congratulated in the TVNZ newsroom at the moment..."
An earlier tweet from Ms Frykberg read: "[LauraFrykberg] has found out who has finally replaced Sean Plunket on Morning Report..."