Meanwhile, Saurashtra player Robin Uthappa has been named as the vice-captain of the side.
Karthik will be taking over the captaincy from KKR's long-serving captain Gautam Gambhir, who had led the franchise to their two IPL titles in 2012 and 2014.
Gambhir joined Delhi Daredevils after, the Shah Rukh Khan-owned side decided not to pick him for this season.
"It is an honour to represent KKR, one of the most successful franchises in the IPL and I look forward to this new challenge. I am excited about the squad that has been assembled, which has a great combination of experience and youth. I will do my best to represent brand KKR and the millions of KKR fans," Karthik said.
Announcing this appointment, KKR's MD and CEO, Venky Mysore said, "It is indeed a start of a new phase for KKR, and we are delighted that someone as experienced as Dinesh Karthik will lead the side."
The 32-year-old, who has played 152 games since the inception of the IPL, was bought for Rs 7.4 crore during the IPL mega auction.
KKR will begin their IPL journey at Eden Gardens on April 08.
The KKR squad for IPL 2018 is as follows:
Dinesh Karthik (c), Robin Uthappa (vc), Sunil Narine, Andre Russell, Chris Lynn, Mitchell Starc, Kuldeep Singh Yadav, Piyush Chawla, Nitish Rana, Kamlesh Nagarkoti, Shivam Mavi, Mitchell Johnson, Shubman Gill, Ranganath Vinay Kumar, Rinku Singh, Cameron Delport, Javon Searless, Apoorv Vijay Wankhade, Ishank Jaggi.