The appointment was approved by the company board on April 7 and marks a major change in leadership positions at L&T where Naik has served for over 52 years, including as its head for over 17 years, the company said in a statement.
Subrahmanyan is currently the deputy managing director and president of the company.
The board had also requested Naik, Group Executive Chairman, to provide guidance and mentorship to the company's leadership subsequent to his current term.
He will assume the new role of non-executive chairman for a period of three years beginning October 1, immediately upon his retirement as Executive Chairman on September 30.
Naik said Subrahmanyan has a great work ethic and business acumen to take L&T to greater heights in the future.
"I have full confidence that under him L&T will remain steadfast to its core values, fulfill the expectations of our stakeholders and continue to play a key role in building a stronger India," he said.
Subrahmanyan termed the appointment high honour and immense responsibility.
He said he looked forward to jointly writing a new chapter for L&T along with the high calibre employees while ensuring to continue delivering value to the stakeholders.
Subrahmanyan joined the construction business of L&T in 1984 as a project planning engineer after completing a degree in civil engineering and post-graduation in business management.
The L&T construction business has grown multifold under his leadership to rank among the top 25 global contractors and by far the largest EPC player in the country. In 2011, Subrahmanyan was inducted into the L&T board.
Under Naik's leadership, L&T transformed into a $17 billion group with presence not only in engineering and construction but also in technology, manufacturing and financial services operating in over 30 countries.