The appointment was made by President of the EU Commission, Ursula von der Leyen this morning.
Following Mr Hogan's resignation, Ms von der Leyen invited the Government to nominated a male and a female candidate, choosing Ms McGuinness and Andrew McDowell.
Mr McDowell is the outgoing European Investment Bank (EIB) vice-president, while Ms McGuinness has been first Vice-President of the European Parliament since 2017.
Ireland's new appointee will be in charge of the financial services and financial stability portfolio.
Taoiseach Micheál Martin welcomed Ms McGuinness' selection and her assignment of the financial services portfolio.
"“Mairead McGuinness has represented Ireland in the European Parliament with distinction for sixteen years, and I am confident that she will now be an excellent Commissioner, working for the whole of the European Union.
“I congratulate her wholeheartedly on her selection. The Financial Services portfolio is a hugely significant one and I am very pleased that this post has been secured for the Commissioner designate."
In a statement Ms von der Leyen commended both candidates.
"Yesterday I interviewed the candidates put forward by the Irish government for the post of Commissioner. Both candidates showed great commitment to the European Union and to the job of Commissioner. They also both clearly have significant experience of EU matters, of course from different perspectives.
"Following these interviews, I have decided to propose to the Council and the European Parliament the appointment of Ms McGuinness to the post of Commissioner. She will be in charge of financial services, financial stability and the Capital Markets Union.
"Executive Vice-President Valdis Dombrovskis will assume responsibility for the trade portfolio, and he will remain the Commission's representative on the Eurogroup, alongside with Commissioner Gentiloni.
"Ms McGuinness has significant political experience on EU issues, having been an MEP since 2004 and currently holding the post of first Vice-President of the European Parliament.
"This experience is crucial in carrying forward the EU's financial sector policy agenda and ensuring it supports and strengthens the Commission's key priorities, notably the twin green and digital transition."
Ms McGuinness' MEP seat will be taken by Fine Gael's Louth Councillor Colm Markey.