Gen Rawat is retiring on Tuesday as Army Chief after a three-year stint. He is widely expected to be appointed as the country's first Chief of Defence Staff.
Official sources said the file relating to appointment of the CDS has been cleared by the competent authority on Monday but the government is yet to make an official announcement about it.
Lt Gen Naravane is currently serving as Vice Chief of the Army.
Before taking charge as vice chief of the Army Staff in September, Lt Gen Naravane was heading the Eastern Command of the Army which takes care of India's nearly 4,000-km border with China.
In his 37 years of service, Lt Gen Naravane has served in numerous command and staff appointments in peace, field and highly active counter-insurgency environments in Jammu and Kashmir and the Northeast.
He has also commanded a Rashtriya Rifles Battalion in Jammu and Kashmir and an infantry brigade on the eastern front.
He was also part of the Indian Peace Keeping Force in Sri Lanka and had served as India's defence attache at the Indian Embassy in Myanmar for three years.
Lt Gen Naravane is an alumnus of the National Defence Academy and the Indian Military Academy.
He was commissioned into the 7th battalion, the Sikh Light Infantry Regiment in June 1980.
The General is a decorated officer who has been awarded the 'Sena Medal' (Distinguished) for effectively commanding his battalion in Jammu and Kashmir.
He is also a recipient of the 'Vishisht Seva Medal' for his services as the Inspector General Assam Rifles (North) in Nagaland and the 'Ati Vishisht Seva Medal' for commanding of a prestigious strike corps.
The sources said the new CDS is likely to take charge on January 1. The defence ministry on Saturday amended rules to allow the Chief of Defence Staff to serve up to a maximum age limit of 65 years.
The changes have been made in the services rules of the Army, Navy and the Indian Air Force for extension of retirement age of the Chief of Defence Staff to a maximum of 65 years if a service chief is appointed to the post.
However, the tenure of the CDS is yet to be announced.
In a landmark decision, the Cabinet Committee on Security had last Tuesday approved the creation of the CDS who will act as the principal military adviser to the defence minister on all matters relating to tri-services.
A key mandate of the CDS will be to facilitate restructuring of military commands for optimal utilisation of resources by bringing about jointness in operations, including through establishment of joint/theatre commands.
Officials said bringing about jointness in operation, logistics, transport, training, support services, communications, repairs and maintenance of the three services within three years will be another major mandate of the CDS.
The tri-service agencies, organisations and commands relating to cyber and space will be under the command of the CDS and he will also function as the Military Adviser to the Nuclear Command Authority.
Gen. Rawat assumed charge as Chief of Army Staff on December 31, 2016. Before becoming Army Chief, he handled various operational responsibilities in many areas, including along the LoC with Pakistan, the LAC with China and in the Northeast.