The move is likely to bolster Abbas in his showdown with rival Palestinian group Hamas.
Abbas declared on Sunday that he will call for snap elections in 2009 if Hamas fails to come to any agreement with his Fatah faction.
The PLO is an umbrella organisation of Palestinian groups but Hamas is not a member.
Abbas’ aides are expected to use his new title to counter arguments by rival Hamas that he should step aside in January.
Fawzi Barhoum, a Hamas spokesman, rejected the decision, because the PLO council is not an elected body. “They were never elected by the Palestinian people, and those who were not elected have no right to elect others,” he said.
Lamis Andoni, Al Jazeera’s political analyst, said: “The decision is meant to block any attempt by Hamas to challenging his [Abbas’s] presidency.
“However, it will create a new set of political problems as it will widen the gap between Hamas and the PA at a time when Palestinians need to work closely on restoring national unity.”