Lieutenant-General James Benjamin Dutton will start in December as the official representative of Queen Elizabeth II on the rocky Mediterranean outcrop, which Britain has held since 1713.
The position of governor is largely ceremonial as Gibraltar has its own government, led by chief minister Fabian Picardo, who has played a vocal role during the recent flare-up of tensions with Madrid.
Dutton had a number of stints in Iraq starting with his leadership of 3 Commando Brigade during the 2003 US-led invasion to topple Saddam Hussein. He served in Afghanistan as the deputy head of the NATO-led international Security Assistance Force in 2008 and 2009.
His 37-year career in the Royal Marines also included serving in the 1982 Falklands War with Argentina.
"I am delighted and honoured to be going to Gibraltar, especially given its historical connections with the Royal Marines," Dutton said in a statement.
"I hope that my many years of military experience combined now with three years of commercial experience will equip me well to deliver the governor's role and responsibilities toward Gibraltar and the United Kingdom."
He will succeed former Royal Navy Vice-Admiral Adrian Johns in the post of governor.
A row between London and Madrid broke out earlier this year after Spain introduced stringent border checks which have led to waits of up to five hours for motorists trying to enter the territory.
Gibraltar has accused Madrid of imposing the checks in retaliation for its decision to place concrete blocks in the sea as part of its efforts to improve fishing.
A team of EU monitors will go to the Spanish border with Gibraltar next week.