The 67-year-old Bernstein succeeded David Triesman who resigned this year.
The FA has been without a full-time chairman since Triesman left in May after being taped making unfounded allegations about England's World Cup bidding rivals Russia and Spain which were published by a Sunday newspaper.
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Bernstein has a strong business background, unlike Triesman who was a former Government minister.
"It's a very great honour and privilege to be asked to take over this role, at what has not been the easiest time," Bernstein told Sky Sports News.
Roger Burden, the acting chairman, was a strong candidate for the job before withdrawing from the process after England's failure to win the right to host the 2018 World Cup this month.
Burden said he would not stand for the position full time as he could not work with FIFA officials he accused of betraying the bid by promising to vote for England, then not doing so.
Bernstein, a chartered accountant who has been chairman of Wembley Stadium Limited since 2008, will now take over at the FA when his appointment is rubber-stamped on January 25.
KEY ISSUES
He said he would rather not talk about any of the key issues he will have to deal with until then.
"I will be speaking to a lot of people over the next four or five weeks to get a consensus and a list of priorities to deal with, and I will be very open going forwards after that," he said. "There is a lot to do here."
Bernstein would not be drawn on the FA's relationship with FIFA following England's failure to land the 2018 World Cup finals when they secured just two votes from the Executive Committee, one from their own representative Geoff Thompson.
Former Arsenal vice-chairman David Dein, the international president of England's failed World Cup bid, had been widely considered to be the favourite to get the job.
Dein is also aged 67 with a strong business and football background.
Bernstein, whose business links include being on the boards of major companies including French Connection and Ted Baker, was formerly a director of Manchester City and was also chairman of the club.
During his time there City secured the lease on their new stadium at Eastlands and returned to the Premier League after falling into the third tier of English soccer at the end of the 1990s.
Sports minister Hugh Robertson welcomed Bernstein's appointment.
"David Bernstein has a strong background both in the business and football worlds," Robertson said in a statement.
"The challenge for him will be to build a stronger Football Association and develop our national game at all levels."
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