Dilley, a former chair of the Arup Group, will take up the £100,000-a-year post in September, when the term in office ends of Lord Smith of Finsbury, the former secretary of state for Culture, Media and Sport.
The Efra Committee questioned Dilley on Tuesday about his previous experience and suitability for the role, considering his business skills, dealings with government and media-facing experience.
The new chair will spend two or three days a week at the Environment Agency, which employs around 10,600 staff and is the frontline service for flood protection, environmental regulation and water resource management.
Anne McIntosh, chair of the Efra committee, said: “We are satisfied that Philip Dilley has the professional competence and personal independence required for the post of Chair of the Environment Agency.
“We wish Mr Dilley every success in his new post.”