Power will join the bank in January 2012.
Westpac chief executive George Frazis said Power would bring a range of skills and experience to the role.
"We are extremely excited to be joined by someone with such an outstanding record of leadership and achievement at the highest level," he said.
Power said he was excited by the new challenge and a new environment.
"This is the beginning of a new and exciting chapter in my career," he said.
"One of my objectives after leaving Parliament is to contribute to the growth of New Zealand in the private sector and I feel that with my experience in working with and implementing change I can do that."
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