Mbappe's first game as captain will be Friday's Euro 2024 qualifier against the Netherlands at the Stade de France, Les Bleus' first match since their World Cup final disappointment in Doha on December 18.
Tottenham goalkeeper Lloris, 36, brought an end to his international career in January, in the weeks after Lionel Messi's Argentina side beat the French in a penalty shootout following a thrilling match that ended 3-3 in extra-time.
Lloris had been skipper for more than a decade.
Atletico Madrid attacker Antoine Griezmann was named vice-captain after Manchester United centre-back Raphael Varane also hung up his boots following the defeat to Argentina in December.
Mbappe, who scored a hat-trick in the World Cup final defeat, had been heavily linked with the captain's role for weeks.
Michel Platini, who captained France to victory in the 1984 European Championship, said the decision was "a very good idea".
"In giving him the responsibility of the captaincy, it allows Kylian, when necessary, to go still further, higher, stronger," Platini, the ex-head of European football's governing body UEFA, said in a statement to AFP.
Mbappe helped Les Bleus to World Cup glory as a teenager in 2018 and has established himself as arguably the leading forward on the global stage.
The Paris-born former Monaco player is vice-captain at PSG behind Brazilian defender Marquinhos and led the side in the defender's absence during Sunday's loss to Rennes.
Mbappe has scored 19 goals in 24 Ligue 1 matches this season and contributed seven goals in PSG's run to the last 16 of the Champions League, where they were knocked out by Bayern Munich.
France are grouped with the Dutch, the Republic of Ireland, Greece and Gibraltar in their qualifying group for Euro 2024, to be held in Germany.
Mbappe to Captain France Footballers
FILE: Paris St Germain's Kylian Mbappe celebrates with a trophy during the ceremony after becoming Paris St Germain's all time top goalscorer with 201 goals REUTERS/Sarah Meyssonnier
CLAIREFONTAINE-EN-YVELINES, FRANCE - Kylian Mbappe will take over as captain of France after Hugo Lloris stepped down following the World Cup final defeat to Argentina, a source close to the team has told AFP.