NATO Secretary-General Jens Stoltenberg will become the new head of Norway's central bank, the government said, Reuters reported.

Although the vacancy has been open since 1 March, Stoltenberg said he will first complete his term at NATO, which runs through the end of September 2022.

Stoltenberg will be responsible for setting interest rates and managing financial stability, as well as overseeing Norway's sovereign wealth fund, the world's largest with $1.4 trillion in assets.

"I've been concerned with identifying the best central bank governor for Norway, and I'm convinced that this is Jens Stoltenberg," Finance Minister Trygve Slagsvold Vedum said in a statement.

Stoltenberg, an economist by training and former leader of the Labour Party, was Norwegian prime minister from 2000-01 and 2005-13 before becoming NATO chief the following year. He has also been finance minister and energy minister.

The government has announced that Ida Walden Bach, deputy governor of the central bank and Stoltenberg's main rival in the post, will serve as acting head of the central bank until Stoltenberg takes over.