Nath, now the Expenditure Secretary, succeeds Ashok Chawla who retired on January 31. She will continue to hold the charge of Expenditure Secretary as well.
Nath was to retire on March 31 this year.
An official statement said the appointment was approved by the Appointments Committee of the Cabinet.
Nath, the senior most official in the finance ministry, has been working as Secretary in the Expenditure Department since April 2008.
Meanwhile, R Gopalan, who has been appointed as Secretary, Department of Economic Affairs, will hold charge till April 30 this year, the statement added.
Chawla was also Secretary in Department of Economic Affairs.
Both Nath and Gopalan are expected to be the main architects of the Budget which will be presented by Finance Minister Pranab Mukherjee on February 28.
The Finance Ministry is in the process of firming up the proposals for the 2011-12 Budget.