Khosrowshahi will be at Uber for an all-hands meeting on Wednesday and is expected to take questions from employees. He will also meet with Uber employees in smaller groups over the next few weeks and spend time with the company's drivers as well.
Kalanick said in a statement that he couldn't be "happier to pass the torch to such an inspiring leader."
Arianna Huffington, who sits on the company's board, also congratulated Khosrowshahi on Twitter.
Benchmark Capital, a major investor in Uber, also congratulated Khosrowshahi. Benchmark had reportedly been backing Hewlett Packard Enterprise CEO Meg Whitman for the top job at Uber.
As CEO of Expedia, Khosrowshahi had been credited with expanding the U.S.-based travel company's global presence through several online travel booking brands, which include Expedia.com, Hotels.com and Hotwire.
Meanwhile, Uber, which is now valued at about $70 billion, has spent recent months fending off chaos on all sides.
The company's ride-hailing business has suffered a series of setbacks. Those include sexual harassment allegations, a slew of firings related to a workplace culture investigation, political pressure, tussles with regulators, a legal battle with Alphabet, alleged distribution of a rape victim's medical records, a report of drug use, unflattering videos and emails from the former CEO, mergers, an exploding car, steep losses and infighting among investors — just to name a few.
Amid some of those problems, Kalanick stepped down as CEO in June following a shareholder revolt. Uber had been searching for a replacement since then, as news piled up of infighting on the board.
Read the full email sent to Uber employees below:
We are delighted to announce that Uber's Board has voted unanimously to appoint Dara Khosrowshahi to be our new CEO.
Dara came to America at nine years old when his family escaped Iran on the eve of the Iranian Revolution. He grew up in Tarrytown, N.Y., trained as an engineer at Brown, and spent many years at IAC serving as Chief Financial Officer and in various operational and strategic roles.
In 2005, he became CEO of Expedia, which he built into one of the world's leading travel and technology companies, now operating in more than 60 countries. He has four children and not surprisingly loves to travel, one of his favorite trips being to the Angkor Wat temples in Cambodia where his wife Sydney said yes to marrying him.
We're really fortunate to gain a leader with Dara's experience, talent and vision. The Board and the Executive Leadership Team are confident that Dara is the best person to lead Uber into the future building world-class products, transforming cities, and adding value to the lives of drivers and riders around the world while continuously improving our culture and making Uber the best place to work.
Dara will be joining us tomorrow, August 30, for an All Hands. Add your questions for Dara here, and stay tuned for a calendar invite with more details. He'll also be meeting with employees around the world in smaller groups over the next few weeks, and spending time with drivers.
Please join us in welcoming Dara on what promises to be an exciting ride!
-Yasir, Garrett, Matt, Ryan, Arianna, Travis, Wan Ling & David
— CNBC's Anita Balakrishnan contributed to this report.