She is the first woman to hold the top post in a public university in Bangladesh.
Islam, a professor in the university’s Department of Anthropology, will serve for the next four years.
President Md Abdul Hamid chose her from the 3-member panel, which was elected by the university senate. He also appointed Prof Abul Hossain of physics department as pro-vice chancellor.
An order from the education Ministry on Sunday also relieved acting VC Prof MA Matin of his responsibilities.
Farzana did her post graduation in sociology from Dhaka University in 1980 and joined Chittagong University as a lecturer of the sociology department in 1982.
In 1986, she joined the anthropology department of Jahangirnagar University and subsequently became its chairperson.
She did her PhD from Sussex University of the UK in 2001.
Besides, she is currently the Chairperson of Nagarik Udyog, a non-government organisation.
She was born in Bhedorganj Upazila of Shariatpur district in 1957.