Karlström will head up the contractor's worldwide business, sitting above national bosses such as Skanska UK chief executive David Fison.
Current group president and chief executive Stuart Graham had previously announced his intention to step down in 2008 and he will make way for Karlström in April.
"Skanska's profitability and financial performance has improved significantly under Stuart Graham's leadership and today Skanska stands stronger than ever," said Skanska board of directors chairman Sverker Martin-Löf.
"The Board has looked for a successor with equally strong characteristics - a very solid performance record, a genuine personal value base and great leadership skills. Johan Karlström fills all of these requirements and also has extensive experience of Skanska and the industry."
Karlström, 51, holds a Master of Science in Engineering and first joined Skanska in 1983. After five years as president and chief executive for mechanical and electrical firm BPA (later Bravida), Karlström joined Skanska again in 2001 and became executive vice president and member of the contractor's Senior Executive Team (SET).
Since 2004 he has also been responsible for Skanska's U.S. construction business.
"I think we are very well-positioned, with our strong Skanska values and a solid strategy that we will continue to pursue with very dedicated employees around the world," said Karlström.
"I also foresee great opportunities for Skanska with the increasing focus on environmentally friendly solutions," added Karlström, who has been responsible in SET for Skanska’s new Green Construction initiative.
Graham will stay on at Skanska as chairman of the contractor's U.S. business and as an advisor to Karlström and the board of directors.