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Donald Tusk and Federica Mogherini.

"The suspense is up, the new EU leadership team is complete," said current EU President Herman Van Rompuy moments after the announcement was made, cites LETA.

Van Rompuy said the new team faced three major challenges: the stagnating European economy, the crisis in Ukraine which he called "the gravest threat to continental security since the Cold War," and Britain's place in the EU.

"I come to Brussels from a country that deeply believes in the significance of Europe," the center-right Tusk told a news conference with Van Rompuy and Mogherini.

He insisted that "no reasonable person can imagine the EU without the UK" and pledged to do everything possible to meet London's demands for reform.

British Prime Minister David Cameron said he was "delighted" by Tusk's appointment and by his comments.

Tusk will take office on December 1 while Mogherini, if confirmed by the European Parliament, will start her new job on November 1.

Strongly backed by German Chancellor Angela Merkel, the 57-year-old Tusk is a pro-European free marketeer with roots in Poland's Solidarity anti-Soviet trade union who has been prime minister since 2007.

Merkel said Tusk "faced big challenges" and lauded him as "a qualified, committed and passionate European, 25 years after the fall of the Berlin Wall, 25 years after the end of the Cold War."

He will also head up summits of the countries that use the euro, despite years of questioning the wisdom of eurozone bailouts as prime minister and Poland not being a member of the single currency.

Mogherini, Italy's 41-year-old foreign minister, has long been a favourite to replace Catherine Ashton as head of the EU's foreign service, hailed by her supporters as a new, younger face for Europe.

"I hope I can join the new energy of the new European generation that is there not only among the EU citizens but also in the EU political leadership," Mogherini said.

With leaders unnerved by Russia's latest actions in Ukraine, the nomination of Tusk to replace Belgium's Van Rompuy could send a message of resolve to Moscow as EU leaders also mull fresh sanctions.

Mogherini's candidacy initially faced fierce resistance, with Eastern European countries – and reportedly British officials – criticizing her as both inexperienced and too soft on Russia.

She was initially sidelined at a first EU summit in July. But six weeks later, and after Italy staunchly backed more sanctions against Russia, Mogherini, who speaks fluent English and French, was put in a stronger position.

"I know the challenges are huge, especially in these times of crisis," Mogherini said. "All around Europe we have crisis."