Hughes is the replacement for former captain Allan Border who resigned from the post recently.
"I am absolutely delighted to be appointed to the role," said Hughes.
"I always wanted to stay involved in cricket at the highest level when I left the game - either through coaching or as a selector; it has certainly been one of my ambitions. I am excited to be joining Trevor Hohns, David Boon and Andrew Hilditch on the panel as we try and keep Australian cricket at the top."
CA chairman Bob Merriman said, "We congratulate Merv Hughes on his appointment to the national selection panel. Replacing a man of Allan Border's calibre was no easy task, but it is one of Australian cricket's strengths that we had a number of highly qualified candidates capable of filling the important role.
"As a former Australian representative, Merv has an outstanding understanding of the game at the elite level, and his experience and insight will certainly add to the wealth of knowledge among our national selectors.
"The national selection Panel has perhaps the most difficult job in cricket and over a long period of time they have shown great integrity, wise judgement and experience in their decisions and these are always made in the best interests of Australian cricket.