Sinha, a 1979 batch IPS officer of the Bihar cadre, was the special director in the CBI.
The appointments committee of the Cabinet, headed by Prime Minister Narendra Modi, cleared the name of Sinha who was among the candidates shortlisted by the committee earlier on Tuesday evening.
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Earlier on Tuesday, Modi held discussions with the Chief Justice of India and the leader of the main Opposition party in the Lok Sabha to select a CBI head.
The panel discussed the names of more than 40 officers shortlisted by the department of personnel and training, sources said.
Ranjit Sinha retired on Tuesday after a tumultuous tenure of two years at the helm of affairs in the CBI.
Sinha's tenure as the CBI chief saw highs like the busting of some bribery cases involving a railways board member, the chairman and managing director of a public sector bank and the chief executive officer of censor board.
The lows were mainly the criticism he faced from the Supreme Court that asked him to withdraw from the 2G probe; criticism from a court for shoddy probe in coal scam cases; sharing of status report in the coal case with the then law minister Ashwani Kumar, after which the agency earned the name of "caged parrot" from the apex court.
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