"The House of Representatives has appointed General Khalifa Belqasem Haftar as top military commander," said Tarek Saqer Juroushi, deputy head of the defence committee at Libya's elected parliament.
He said Haftar had been promoted to lieutenant-general, adding that he would be sworn in on Tuesday or Wednesday.
Libya has been awash with weapons since the 2011 uprising that toppled Muammar Gaddafi, and opposing militias have since been battling for control of its cities and oil wealth, Al Jazeera reported.
It is mired in a conflict pitting the recognised government, based in the eastern city of Tobruk, against a rival administration set up by an armed faction known as Libya Dawn that took over the capital Tripoli last summer.
A former general who helped Gaddafi come to power only to fall out with him in the 1980s, Haftar has become one of the most divisive figures in post-revolution Libya. He joined the 2011 rebellion against Gaddafi and re-emerged on the political stage last year.
Last May, he began a self-declared war against the militants in Benghazi. He gained support from some Libyans tired of their country's chaos, but also criticising air strikes and attacks on civilian airports and sea ports.
Haftar has merged his irregular forces with army troops in the east to fight disparate Islamist groups. But he has also targeted forces loyal to the Libya Dawn armed faction.
The United Nations is trying to organise peace talks between the rival administrations to defuse the violent power struggle that is threatening to tear apart the North African country.