A palace statement said Sultan Muhammad V has approved terminating the current Attorney General Mohamad Apandi Ali and replacing him with Mr Thomas, who is the first person from the minority community to hold the post in 55 years in the Muslim-majority nation.
Prime Minister Mahathir Mohamad had recently proposed to nominate Mr Thomas, 66, as the Attorney-General, the official Bernama news agency reported.
The king called on all Malaysians to accept that the appointment of the Attorney-General should "not create religious or racial conflict as every Malaysian should be fairly treated regardless of race and religion."
The king also expressed his disappointment and worry about "inaccurate and negative" media reports of late which could threaten peace and harmony in the country, it said.
Mr Thomas is best known as a constitutional law expert and a civil litigator in court cases in matters as varied as administrative law, banking, finance, corporate and commercial law.
He has been a lawyer in Malaysia for 42 years, having been called to the Bar in the United Kingdom in 1975 and called to the Malaysian Bar in 1976, Malaymail.com reported.
He had also served the legal community in peninsular Malaysia through the Malaysian Bar's governing body Bar Council, which he was a member of during 1984-1988 and 1993-2001 - including a stint as Bar Council secretary from 1995-1997.
The appointment of Tommy Thomas has caused division among the Malaysian public as petitions - both objecting and supporting his nomination - have cropped up.
Parti Islam Se-Malaysia's information chief on Saturday also protested against the government's pick, saying that the candidate should be an individual "who can protect Islam as the official religion of the country".
The Malaysian government had defended its nomination of Mr Thomas, saying that it would be the right signal to send to Malaysians and the rest of the world that the new administration was serious about reforming the country's institutions.