The 51-year-old Muilenburg joined Boeing in 1985 as Seattle-based intern, the company said.
Boeing stock fell slightly in after-hours trading following the announcement. McNerney said that investors should take comfort in the fact Muilenburg is unlikely to make significant strategy changes.
"Dennis is well known to our investor group, and quite frankly I've had many occasions to present to them next to Dennis, and he's pretty darn good," McNerney said. "Dennis and I have been working side by side for the last year and a half, he's been making decisions with me that he's now going to live with, I'm now going to be part of in the chairman's role."
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"The source of reassurance that they can draw on is that we have crafted that strategy together, and in many ways there's not going to be a change except generationally, and it's time for that," he added.
For his part Muilenburg reiterated that the company is sticking to its plan crafted under McNerney. "We have a strong strategy in place, and we're going to continue to execute that with pace and confidence," he said.
The transition comes amid a historic boom in the commercial jet market and as Boeing faces tough challenges to build its defense business amid shrinking defense spending. Boeing is preparing to celebrate its 100th anniversary next year.
McNerney oversaw a near doubling of revenue to a record $90.8 billion in 2014, and focused on improving Boeing's profit margins by pressing suppliers to cut prices. He also secured long-term contracts with unions.
—Reuters contributed to this report.