Sir Elton will chair the Old Vic's Theatre Trust
The trust bought the 180-year-old venue in 1998 to save it from closure, and Sir Elton will join Oscar-winning actor Kevin Spacey, who is on the trust's board.
The venue's acting company was run by Sir Laurence and Ralph Richardson after World War II, and it has seen performances from many famous names including Sir John Gielgud.
It is hoped that Sir Elton's involvement will "energise and enthuse the theatre-going public", the Old Vic's chief executive Sally Greene said.
The Theatre Trust predicted that Sir Elton would lead the Old Vic into a new phase of development and growth, paying tribute to his "profound love and respect" of theatre.
Sir Elton confessed to being proud of his new role.
"I am immensely excited about contributing to the future of this great theatre," he said.
"The Old Vic is one of the most important theatres in Great Britain, having been the home to some of the greatest actors and companies of the last century."
Sir Elton has been more and more involved with theatre over the past few years - but until now, that involvement had been limited to writing scores for musicals.
He has composed the music for The Lion King and Aida, and is working on a score for a stage version of the film Billy Elliott.
The Old Vic post is not his only chairmanship - he holds the same role at Watford football club.
History
Opened in 1818, the Southwark theatre is regarded as being one of the most important in London.
Sir John led the first Old Vic Company in 1929, while Sir Laurence and Ralph Richardson led the rebuilding after it was damaged in the Blitz.
A young Dame Judi Dench and Dame Maggie Smith joined its company early in their careers before it became the first home of the National Theatre in 1963.
It has also seen acclaimed performances from Peggy Ashcroft, Alec Guinness, Vivien Leigh, Michael Redgrave and Peter O'Toole.
In 2000, Spacey launched a drive to raise £1m for the Old Vic after appearing there in a well-received production of The Iceman Cometh.