Lloyd, also a former ICC match referee, replaces India batting great Gavaskar, who stood down in May after eight years in the job amidst concerns the role was incompatible with his media commitments.
An aggressive batsman and brilliant cover fielder who led the all-conquering West Indies teams of the mid-1970s and early 1980s, Lloyd was selected for his current post ahead of former Pakistan captain Majid Khan.
Gavaskar, a former India captain and the first man to score 10,000 Test runs, said in May when he announced his decision to step down: "With more and more cricket being played it has become clear that it is not possible for me to do justice to two jobs, the chairmanship of the ICC cricket committee and my media commitments."
His ICC position appeared to become untenable in January when he criticised match referee Mike Procter's decision to ban India off-spinner Harbhajan Singh for three Tests for racially abusing Australia's Andrew Symonds during the Sydney Test.
Not only did Gavaskar accuse the former South Africa all-rounder of making a judgment without sufficient evidence, he also wrote in the Hindustan Times: "Millions of Indians want to know if it was a 'white man' taking the 'white man's' word against that of the 'brown man.'"
However Procter was criticised for not keeping a detailed record of the hearing. His explanation for his ruling: "I am South African, and I understand the word 'racism'," was felt by many within the ICC to be an inadequate response to the charges facing Harbhajan.
In an amendment to its disciplinary procedures, the ICC announced Thursday: "An elite panel referee will be entitled to report a level three and level four breach of the ICC code of conduct."
Significantly, it added: "The breaches will then be referred to an independent, suitably legally qualified adjudicator. The person to be appointed will come from the existing list of ICC appeals commissioners."