The announcement was made to coincide with the trade association’s 25th anniversary, which was celebrated at the Gherkin in London.
Thompson, who is currently international director at British Water, will be the first woman to lead the organisation.
She said: “I am very excited about the opportunity to lead British Water and represent the interests of its members at all levels. This is a time of significant change both within the industry and politically, especially with Brexit imminent.
“It is important that British Water delivers a broad spectrum of services that help our members grow both at home and overseas. Integrated catchment management is increasingly seen globally as essential for effective water and wastewater management and a closely networked supply chain is key for the delivery of successful projects.”
British Water, which represents the UK water industry’s supply chain, has more than 200-member companies. It recently carried out a root and branch rebranding exercise.
The changes include a new logo and will be rolled out across the association’s media platforms in the coming weeks.
British Water chairman Chris Loughlin said: “This is an exciting time for British Water as we celebrate our 25th anniversary and announce our new chief executive. We are also marking the milestone by rebranding the association.
“I am delighted to welcome Lila Thompson to her new role at the helm of British Water after undertaking an extensive search internally and externally for the right candidate. She has already demonstrated a long-term commitment to the association and has built strong relationships with many of our member companies.
“I look forward to working closely with Lila in growing the organisation and enhancing the opportunities we can open up to members. I would also like to take the opportunity to thank Lloyd Martin for his outstanding leadership over the last three years.”
Martin took over as chief executive of the association in October 2016, having served in the role on an interim basis since March of the same year.
He has more than 35 years’ experience in the water industry and has worked in the UK and international markets, in both the public and private sector.