The 78-year-old prince who has been interior minister for nearly four decades succeeds Prince Sultan bin Abdul Aziz, who died last week in New York and was buried on Tuesday in Riyadh, AFP reported on Thursday.
Nayef would take over the throne of the oil-rich kingdom upon the death of King Abdullah, 87, who is recovering from his third operation in a year.
However, with the king’s health problems, the new crown prince is expected to assume an active role immediately.
The royal decree read out on state television called on King Abdullah’s inner circle to recognize Nayef’s new status.
Video on Saudi TV showed the king sitting silent in an armchair, wearing a white headscarf and robe, with another cream-colored robe draped over his shoulders.
The crown prince was also named as deputy prime minister, but the appointment of new defense minister has been withheld. The post was left vacant by the death of Sultan, who served as defense minister of the kingdom for some 50 years.
Historically, in Saudi Arabia the king chooses his heir, but Prince Nayef was selected by Allegiance Council, a 37-member body composed of his brothers and cousins.
Nayef earned hatred in the West when in a 2002 interview he said the “Zionists” benefited from the September 11 attacks in New York because it turned world opinion against Islam and Arabs.