The appointment was made at the ACA AGM which took place on Monday night.
Watson is part of an extended 10-person board which includes three new appointments: current Australian players Pat Cummins and Kristen Beams, and cricket commentator and former Australian cricketer, Lisa Sthalekar.
"I am truly honoured to be elected as the President of the ACA as it evolves into the future. I have big shoes to fill with the people who have gone before me and I am super excited about this opportunity to continue to give back to the game that has given me so much," Watson tweeted following his appointment.
The 38-year-old further praised Cricket Australia's parental policy for women cricketers. "
This policy, amid a host of other changes, assures Australian women that cricket is a sport which can now support you and your family. And for girls coming through who love sport, like my daughter, it says that cricket is a sport where you'll be able to have a career."
The all-rounder had represented Australia in 59 Tests, 190 ODIs and 58 T20Is.
The expanded board is part of a revised governance structure for the ACA, which now also manages the Australian Cricketers' Retirement Account, which benefits Australia's professional cricketers once their careers are over.
The revised structure also splits the role of President and Chair, which will continue to be held by Greg Dyer.
Last week, Cricket Australia had appointed former player Melanie Jones as their director.
( With inputs from IANS )