But she will retain her position as chief prosecutor for the Balkan war crimes tribunal.
The Security Council, in a resolution adopted unanimously, decided to split the posts for the sake of efficiency.
At present Del Ponte holds both jobs for a four-year term which expires on 14 September.
Some say Del Ponte was replaced because of protests from Rwanda after she pursued prosecutions of its Tutsi-dominated government.
But the council's US-drafted resolution said such investigations should continue.
Del Ponte's spokeswoman, Florence Hartman, said she will accept a second term for the war crimes court on the former Yugoslavia where she is prosecuting Slobodan Milosevic.
Her confirmation that she will stay in the post ended speculation she might quit after protesting earlier this month at her imminent removal from the Rwanda tribunal.
UN Secretary-General Kofi Annan immediately appointed Hassan Jallow, 52, a former Gambian Supreme Court judge, as prosecutor for the Rwandan court.
Del Ponte is prosecuting former
Yugolsav leader Slobodan
Jallow is currently an appeals judge for a UN-backed court trying war crimes in Sierra Leone, and served as a judge on the Yugoslav tribunal.
The UN in the 1990s created the two tribunals which it wants to close by 2010.
One was to try war crimes in the former Yugoslavia in The Hague, Netherlands.
The other, based in Arusha, Tanzania is prosecuting the perpetrators of genocide in Rwanda, where Hutus killed 800,000 people, most of them Tutsis.
Del Ponte has blamed the Kigali government for the change because Rwanda stopped cooperating with her after she said she would pursue possible crimes committed by the Tutsi-led army.
The division of prosecutorial duties has been advocated by the United States and Britain for several years.
Rwanda has criticized the court for inefficiency despite its 16 judges, more than 800 staff members and a budget of nearly $100 million a year.
It says Del Ponte spends most of her time in The Hague.