Lena Hjelm-Wallen, the chairwoman of the party's election committee said: "A unanimous election committee ... put the question to Mona and Mona has said yes."
Pride
Sahlin could also become the country's first female prime minister if the Social Democrats stage a comeback in elections in 2010.
"I feel an incredible amount of pride if I am to be elected the first woman to head the Social Democratic Party," Sahlin said.
"She has vast knowledge of our party and its policies, and a lot of experience. Mona is unbeatable" Lena Hjelm-Wallen, chairwoman of the party's election committee Goeran Persson, the former prime minister, announced he would step down from the party leadership after losing September's general election to a centre-right four-party alliance.
"She has vast knowledge of our party and its policies, and a lot of experience. Mona is unbeatable"
Lena Hjelm-Wallen, chairwoman of the party's election committee
Sahlin was first elected a member of parliament in 1982. She was appointed to her first ministerial post as employment minister eight years later.
She has subsequently held numerous ministerial briefs including that of deputy prime minister.
Hjelm-Wallen said: "She has vast knowledge of our party and its policies, and a lot of experience. Mona is unbeatable."
The Social Democrats have dominated Sweden's political scene in the post-war period, governing for 65 of the past 74 years.