Norwegian Østby, who worked for the UN's development programme UNDP for 27 years and has represented the organisation in 17 countries including East Timor and Iran, will serve as the UN coordinator from November 1st.
Østby will be tasked with coordinating humanitarian work at a time in which the UN and Myanmar authorities are far apart in their views of the treatment of the Rohingya.
“It is a great honour to be asked to take this job. I believe the job will bring about both challenges and opportunities. Myanmar is a land with many conflicts. There is not just conflict relating to the Rohingya people, but there are also other groups who are affected. We must make an effort [with regard to] all conflicts,” Østby told broadcaster NRK.
Since late August, more than 600,000 Rohingya have fled an army campaign in Myanmar's Rakhine state that the United Nations has denounced as ethnic cleansing.
Myanmar authorities say the military operation is aimed at rooting out Rohingya militants who staged attacks on police posts in late August.
The United Nations is urging Myanmar authorities to end the military campaign, grant permission to aid workers to reach those in need in Rakhine and allow the return of the Rohingya from Bangladesh.
Britain and France have presented a draft resolution to the Security Council that lists those demands and calls for the appointment of a UN special advisor on Myanmar.
Diplomats however say China, a supporter of Myanmar's former ruling junta, is resisting calls for the top UN body to step up pressure on the government.