The decision is significant as some CDU members are starting to look ahead to a post-Merkel era and think about potential alternatives to lead their party and country.
Although Tauber is seen as a close associate of Merkel's, infighting within the CDU (Christian Democratic Union) led the chancellor to designate another party stalwart to draft the party's electoral platform previous year.
Sometimes dubbed "mini Merkel" by German media, Kramp-Karrenbauer, 55, is a close Merkel ally and highly regarded in her party for winning an election in her region past year that helped the CDU's national standing.
The party's current general-secretary, Peter Tauber, is leaving the post after suffering health issues. The chancellor also announced that she would nominate the CDU's future cabinet members at a CDU executive meeting on Sunday.
Known as "secretary-general" in the German system, the role of party chairman is more powerful and independent than in United Kingdom politics, but does not come with a cabinet seat.
The 55-year-old surprised political commentators in Germany in October when she defeated socialist opposition, who was projected to win, to become prime minister of the small western state of Saarland, which borders France.
If the SPD's almost half a million members reject the deal, a new election or a minority government in Europe's biggest economy are likely.
Technically the appointment still has to be confirmed in a vote next week, but for the party to defy Ms Merkel over the chairmanship - a non-cabinet role - would be unheard of.
The CDU and the Social Democrats (SPD), both weakened by the elections, finally reluctantly renewed their left-right "grand coalition" or "GroKo" last week.
Mrs Kramp-Karrenbauer said: "We are experiencing one of the most hard periods in the Federal Republic of Germany".
Merkel's conservative CDU/CSU bloc remained the strongest political force with 32 percent support.
The Insa poll, carried out for the top-selling Bild newspaper, put the AfD ahead of the crisis-wracked Social Democratic Party for the first time.
Engaged in local CDU politics for more than three decades, Mrs. Kramp-Karrenbauer has made a name for herself as a successful regional politician in Germany's smallest state, Saarland.
Mrs Merkel told a Berlin news conference: "This is about strengthening the CDU at all of its roots, not only in one - but in its full breadth", Merkel said at a joint news conference in Berlin.
Kramp-Karrenbauer commands respect in the party for her serious, factual approach to policymaking.
After weeks of tortuous negotiations, Merkel's conservatives and the SPD this month hammered out a hard-fought coalition pact that still needs to be approved by the SPD's 460,000 rank-and-file.
The first round lasted through Monday bringing more than 0.14 inches of ice, according to the National Weather Service. Strong to Severe Thunderstorms: Isolated storms may produce up to 1 inch hail and wind gusts up to 60 miles per hour .
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