McNabb, who will stay on as chair, served as chief executive since 2008.
McNabb says the time is right for Vanguard to have a new leader and that Buckley is the "ideal next chief executive for Vanguard". Privately held Vanguard manages about $4.4 trillion in assets worldwide.
Buckley will become the Pennsylvania-based firm's fourth chief executive as of 1 January 2018.
Buckley, 48, joined Vanguard in the early 1990s as an assistant to then-chairman John Bogle's and rose through the ranks to become chief investment officer in 2013 with the retirement of former CIO Gus Sauter.
"Tim" Buckley, 48 years old, who is now Vanguard's chief investment officer. He was elected as a principal of the firm in 1998.
"I have worked alongside Tim for many years and he brings a strong passion for serving Vanguard clients and crew, a global mindset, and significant leadership experience in all facets of our operations".
"Vanguard's mutual funds and ETFs have gained additional share the last few years as investors have focused increasingly on lower-cost diversified products". In an interview with Bloomberg on Thursday, Buckley said, "I love that everyone is following us". Much of the investor money has come Vanguard's way. Thanks to Bill's strong leadership over the past ten years, Vanguard is well-positioned to continue helping clients achieve investment success.
The role of Chief Investment Officer will be taken over by Greg Davis, who will take responsibility for the $3.8trn (€3.3trn) now managed by Vanguard's Fixed Income, Equity Index, and Quantitative Equity groups.
Buckley said he is honoured to lead Vanguard into its next chapter and looks forward to continuing to work closely with McNabb over the next six months to transition to his new role.