Vienna  -  Former BAWAG bank chief Ewald Nowotny will become new head of the country's central bank, Chancellor Alfred Gusenbauer confirmed after a cabinet meeting on Wednesday.

Nowotny, a professor at Vienna's University of Economics, will succeed outgoing governor Klaus Liebscher both as head of Austria's central bank OeNB and in his seat at the European Central Bank.

His five-year term term starts on September 1 .

The 63-year-old left-leaning banker's reputation grew after his successful turnaround of ailing BAWAG bank.

Nowotny was at the helm of the formerly union-owned bank from 2006 to 2007, brought in after the bank was shook by a scandals over massive credit losses connected to US brokerage Refco.

Only later, further billions of losses, originating from shady business deals in the Carribbean emerged, making BAWAG a byword for the largest banking scandal in the country's history.

Nowotny left BAWAG after the bank was sold to US-based hedge funds Cerberus in 2007. (dpa)