The appointment made by national selectors was ratified by the Sports Minister.
As the most successful captain produced by the country, the 32year-old Ranatunga's appointment was an automatic one and is not expected to raise any eyebrows.
Having taken over the reins in 1989, Ranatunga has led his country in 36 Tests, winning seven, losing 13 and drawing 16.
As the sole survivor of his country's inaugural Test against England in February 1982, Ranatunga has played in 63 Tests, accumulating over 3500 runs, making him the highest run-getter for Sri Lanka.
It was from the last tour to New Zealand in February/March 1995 that Sri Lanka began a successful run of victories under Ranatunga, which culminated in the country emerging World Cup champions a year later in March 1996.
On that last tour, Sri Lanka recorded their first Test win overseas when they beat New Zealand by 241 runs in the Test match at Napier. Sri Lanka also registered their maiden series win overseas when they took the 2-Test rubber 1-0 by drawing the second Test played at Dunedin.
The forthcoming tour to Kiwi land where Sri Lanka are scheduled to play a series of two Tests and three one-day internationals, will be Sri Lanka's first international engagement for 1997.
Duleep Mendis, the chairman of selectors will manage the team with former Australian cricketer Bruce Yardley (who is expected to arrive in the country on January 20) as coach and Alex Kountouri as physio.
The team of 16 players from a pool of 21, will be selected in the first week of February. The prospective candidates are currently engaged in the country's major first-class tournament - the division I Sara Trophy.