Page, 37, is reclaiming the top job from Eric Schmidt, who had been brought in as CEO a decade ago because Google's investors believed the company needed a more mature leader.
Schmidt, 55, will remain an adviser to Page and Google's other co-founder, Sergey Brin, as Google's executive chairman.
The changes will be effective April 4.
"In my clear opinion, Larry is ready to lead and I'm excited about working with both him and Sergey for a long time to come," Schmidt said.
Page praised Schmidt, too. "There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly," Page said.
"Eric is a tremendous leader and I have learned innumerable lessons from him"
The change in command overshadowed Google's fourth-quarter earnings, which soared past analysts' estimates as the company cranked up its Internet marketing machine during the holiday shopping season.
Shares rose $9.18, or 1.5 percent, to $635.95 in extended trading after the announcement. In the regular session earlier, the stock fell $4.98, or 0.8 percent, to close at $626.77.