Henri Proglio, currently head of water, energy and transport giant Veolia, will become the new head of EDF, French Prime Minister Francois Fillon said in a statement.
Paris said Sarkozy "backs and recommends" the candidacy of Proglio, who is due to replace Pierre Gadonneix at the helm of the world's largest nuclear company next month. The French state owns an 85-percent stake in EDF.
Proglio was considered to be reluctant to leave Veolia, today the world's biggest water company, but it was reported that Sarkozy repeatedly offered him the job.
Finance Minister Christine Lagarde said in an interview on LCI television that "there is a need to hand over the reins and change the team." She called on EDF to focus on its core business.
"We want to show the world the competence of France's nuclear sector."
EDF, which runs 58 nuclear power plants in France that satisfy around 80 percent of the French electricity demand, is expected to lead Britain's nuclear energy revival. The utility has previously announced it would build four nuclear power plants in Britain, with each expected to cost between $7 billion and $8 billion. It also aims to build new reactors in the United States, China and Italy.
But to unlock further investment options, Proglio will have to oversee several asset sales over the next years to cut costs. EDF has accumulated a debt of around $37 billion, in part to the British energy acquisition but also because of a $5 billion price tag for a 50 percent stake in U.S. nuclear company Constellation Energy.
French newspaper La Tribune recently reported that EDF is looking to divert another 20 percent stake in British Energy, the company EDF bought in January for a staggering $20 billion after tedious negotiations involving the French and British governments.
Last month EDF sold a 20 percent package to multinational energy company Centrica to reduce its debt. British Energy generates about a fifth of Britain's electricity, mainly with its eight nuclear power plants. The French utility also plans to offload its distribution business in Britain, which could raise as much as $5 billion.
Under its new leadership, EDF is expected to raise its stakes in Veolia, a company active in the renewable and environmental sector. Sarkozy is eager to boost EDF's role in the renewable energy sector to create a full-service energy giant, observers say.