Sorrell currently runs a foundation that aims to encourage creativity in young people and help designers improve the UK's schools and health services. Chairman of the British Design Council from 1994 to 2000, he recently set up the London Design Festival.
Sorrell replaces Stuart Lipton, who resigned in the summer following an inquiry into a possible conflict of interest. The appointment of a designer complies with advice that the latest chairman should not be a developer.
Sorrell said: "CABE is making a big impact on the way in which architecture and design is perceived in contributing to people's lives. I hope to continue this work over the next five years."