Hudson, previously president of BAE's Land & Armaments Operating Group, succeeds retired U.S. Marine Corps General Tony Zinni, who was named acting president and chief executive in June 2009 after the June departure of Walt Havenstein.

Tony Zinni will continue to serve as chairman of the board of the BAE U.S. unit, BAE said in a statement on Monday.

BAE Chief Executive Ian King said Hudson had developed the BAE land and armaments group into a global business and the world's largest manufacturer of land systems since she took it over in January 2007.

Under her leadership, Hudson led BAE's acquisition of Armour Holdings in 2007, which doubled the size of the group's land systems operations. Since the end of 2006, the BAE unit has nearly tripled sales to $12 billion (7.3 billion pounds) from $3.9 billion

Hudson, an engineer, worked in increasingly senior positions throughout her career at Harris Corp , Ford Aerospace, a unit of Ford Motor Co , Martin Marietta, now part of Lockheed Martin , and General Dynamics .

In 2009, Hudson was named one of Fortune magazine's 50 Most Powerful Women.

The appointment makes Hudson the most senior female executive in the U.S. defence industry, and comes during a major turnover in leadership across the sector.

Northrop Grumman , General Dynamics, Boeing's defence unit, and just last week, the North American unit of EADS have all appointed younger leaders to top jobs in recent months.

"This is a massive generational turnover in a very short time," said Loren Thompson, a defence analyst with the Virginia-based Lexington Institute.

"It's clear that the defence marketplace is at a turning point so maybe it's no surprise that the people who rode the market up are now turning over the reins to a new generation of leaders," Thompson said.

BAE Chief Executive Ian King was in Washington two weeks ago for a series of company meetings and to interview candidates to head the company's U.S. unit.

Hudson had long been considered a strong candidate for the job, although some analysts had said the loss of a potential $3.5 billion (2.1 billion pound) U.S. Army contract for new medium-sized trucks could work against her.

BAE has taken an aggressive stance on the deal, filing three challenges with the Government Accountability Office, and questioning whether the winning bidder, Oshkosh , can meet its bid and carry the associated financial risk.

(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)