This was announced on Thursday by the external affairs ministry.
A 1984 India Foreign Service (IFS) officer, Mr Bambawale is expected to take up the assignment shortly, the ministry said.
He will replace Vijay Gokhale.
A deft hand in Sino-India relations, Mr Bambawale opted to learn Mandarin Chinese as his foreign language and served in Hong Kong and Beijing between 1985 and 1991.
He was first the desk officer for China in the Ministry of External Affairs and served as director in the Americas Division of the ministry, responsible for relations with the US and Canada (1993-94).
He has also functioned as the Deputy Chief of Mission of the Indian Embassy in Beijing.
His appointment comes at a time when India and China are trying to put behind the Dokalam standoff, and work on a "forward-looking" approach in their ties.