David Stevens has taken up the £147,532 a-year role after councillors backed the appointment at the authority's full council meeting on Tuesday.
He takes the top role on a permanent basis having served as interim chief executive for the past five months.
It came after former boss Jan Britton quit the job in July in unknown circumstances.
Just days earlier the council announced Mr Britton, who had been at the helm since 2011, was "away from the office for a period of extended leave".
The recruitment process leading to Mr Stevens' appointment was criticised in some quarters after the post was not advertised nationally.
His appointment on Tuesday was questioned by Councillor Caroline White, who asked why an assurance given in July that the job would be advertised via an executive recruitment agency had not been kept.
In a statement released following his appointment, council leader Yvonne Davies said having a permanent chief executive was key to the council’s stability and future improvement.
“David was in the interim Chief Executive post for five months, doing an excellent job and providing real stability for the council," she said.
“It is essential that David continues the work he has started to put the council on a stable footing and address some of the challenging historical issues that the council has been dealing with.
"We feel David is the best person to do this job.
“David’s appointment was made unanimously by the panel subject to it being ratified at full council.”
Saying it was initially intended to go through an external recruitment exercise for the role after specialist HR advice and ensuring due process was followed, the council decided to advertise the post internally.
A report to the full council showed that Mr Stevens was the only candidate to put his name forward.
Councillor Davies added: “A lengthy recruitment process would have taken up valuable time and resources and would be an unnecessary distraction for the council.
“Therefore, we decided to advertise the position internally, opening it up to senior officers and we went through the proper process with a full member panel holding interviews.”
Commenting on his appointment, Mr Stevens said: “I’m extremely proud to work for Sandwell Council and look forward to working closely with the Leader, the Cabinet and all staff in delivering our big plans for Sandwell and its residents.”
Prior becoming chief executive Mr Stevens was Executive Director for Adult Social Care Health and Wellbeing.
Yvonne Davies has faced criticism from former West Bromwich East MP Tom Watson who urged her to resign as he called for a major overhaul of the Labour Party in the region following the 2019 General Election result.