He also supports the continuation of solid ties with Israel.
Basbug's appointment was announced along with several other promotions and retirements after the annual meeting of Turkey's higher military council, chaired by Recep Tayyip Erdogan, the prime minister.
Board decisions will be sent to Abdullah Gul, the president, for approval.
General Isik Kosaner, the paramilitary gendarmerie commander, takes over the land forces command.
'Cool and calculating'
Seen by Turks to be a hawkish general who is likely to avoid open confrontation with the governing AK party, Basbug's approach differs from that of his predecessor, who often clashed publicly with the government.
"Unlike the often impulsive incumbent ... Buyukanit, Basbug is known for his cool and calculating nature," Wolfango Piccoli, an analyst at political risk think-tank Eurasia Group, said.
"The result will be less likelihood of abrupt escalations in civil-military tension, but at the same time more effective political pressure from the military."
Basbug is regarded as one of the most outstanding officers of his generation, combining a strong intellect with a deep commitment to Turkish secularist, Piccoli said.
"He will occupy the post for the next two years, and is likely to prove a formidable opponent for the AK party," he said.
Basbug's term as head of the land forces saw military reforms designed to train special forces to combat he Kurdistan Workers' Party (PKK), considered a terrorist group by Turkey.
He oversaw February's ground incursion into Iraq to attack Kurdish fighters there, the first such operation by Ankara since the US-led invasion of Iraq toppled Saddam Hussein in 2003.
More than 200 Kurds were killed during the eight-day-long incursion, the Turkish military later said, a claim denied by the fighters.
"He's a commander with great discipline and experience at Nato," Necati Ozgen, a former Turkish army general who worked with Basbug at the Turkish military academy in the late 1970s, said.
"No tolerance should be expected from him in the fight against the terrorists."