Air Chief Marshal Houston served in the Australian Defence Force for more than four decades, including four years as Chief of Air Force and years six years as Chief of the Defence Force.

Water Minister Keith Pitt said it was critical time for the Murray-Darling Basin Plan and he had no doubt it would benefit from Sir Angus' strong leadership and strategic capability.

"I can think of no one better qualified to lead the Authority and to build strong and collaborative relationships with stakeholders than Sir Angus," Mr Pitt said.

"I have every confidence that his experience in defending Australia and our national interests will be exceptionally useful in developing a sense of shared purpose when it comes to stewardship of Murray-Darling Basin water resources with communities, irrigators, and First Nations peoples.

"Having a permanent chair of the Authority for the next four years provides the leadership for the MDBA to engage and work with basin jurisdictions, communities, irrigators and First Nations people to ensure the Basin Plan is implemented in a way that is fair for all."

The MDBA welcomed the former military leader and said his skills would be put to good use.

"Sir Angus has served the nation in several leadership roles, and his well-honed strategic skills will help focus effort towards a healthy working Basin managed in the national interest," a MDBA spokesperson said.

"Australia is the driest inhabited continent in the world, water management is complex and contested, with many competing interests.

"Sir Angus' extensive experience defending Australia and bringing different interests together to work towards a common goal means he is well-placed to lead our agency for the next stage of implementation ahead."