The appointment was announced by new Prime Minister Malcolm Turnbull at a press conference on Tuesday.
Dr Finkel has previously outlined a vision for an "electric planet" and told reporters he wanted Australia to use "no oil, gas or coal".
He was previously Chancellor of Australia`s Monash University and takes over from Professor Ian Chubb.
Speaking at the press conference, Dr Finkel acknowledged that Australia could not get rid of coal "overnight".
"My vision is for a country, a society, a world where we don`t use any coal, oil, or natural gas because we have zero-emissions electricity in huge abundance," he said.
"But you can`t get there overnight. What we need to do is optimise the technology so we can cost-effectively introduce alternatives.
"The best way to get rid of coal is to introduce alternatives that deliver value at a reasonable price rather than just arbitrarily turning it off."
Australia currently has no nuclear power industry and relies heavily on fossil fuels.
Dr Finkel`s appointment comes amid a call by 61 prominent Australians, including the author Richard Flanagan and Wallabies rugby player David Pocock, for a global ban on new coalmines and coalmine expansions.
Previous Prime Minister Tony Abbott was a staunch supporter of coal power, saying "coal is good for humanity" and its use should go "up and up and up in the years and decades to come".
Australia has two massive new coal mines on the way. One, the $16bn Carmichael project in Queensland`s Galilee Basin, was last week given final approval by Mr Turnbull`s government.
Mr Turnbull on Tuesday dismissed the idea of a moratorium on coal arguing that it would make no difference to global emissions as importers would simply buy it elsewhere.
Australia`s new chief scientist Alan Finkel advocates coal-free future
27 October 2015
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Australia has named Dr Alan Finkel, an engineer and vocal advocate of nuclear power, as its next chief scientist.
