He replaces John Hart, who resigned Tuesday.
Daniels began serving as the team's director of baseball operations in 2003 and was promoted to the assistant GM in 2004.
Hart, 57, who was named as GM on Nov. 1, 2001, will remain as senior adviser for baseball operations.
"The management team (Hart) put in place allows me to promote Jon Daniels to become the youngest general manager in major league history," said owner Thomas O. Hicks on the Rangers' Web site. "I am confident in his abilities for the continued growth of the organization. During his tenure the organization has improved on the field at the major-league level while enhancing the minor-league system with a number of top prospects."
Texas was 79-83 last season and finished third in the American League West.