Dalman, an investment banker, first joined the Cardiff board in January 2012 and now replaces Datuk Chan Tien Ghee in the role, following his resignation in March.
Malaysian chief executive Simon Lim had been filling the position in an acting capacity, but he will now hand over the role to 55-year-old Dalman.
And the Cyprus-born business man is excited by his new challenge.
"I am honoured to take up the role of Club Chairman at Cardiff City Football Club," he told the club's official website.
"I have enjoyed my time at the club since joining the Board of Directors in January 2012 and now relish the opportunity to contribute further in my additional role as Chairman with Cardiff City in the Barclays Premier League."
The club's owner, Vincent Tan, has welcomed the appointment of Dalman and predicted a bright future under the new man.
"I am delighted to welcome Mehmet Dalman into his new and additional role at Cardiff City Football Club and look forward to many successful years ahead," he said.
"Mehmet has had many years of experience in business across the world which he has brought to this great club since becoming a Non-Executive Director in January last year.
"This is more great news for the football club following last week’s amicable resolution with the Langston Corporation (over the club's long-standing debt) in which Mehmet played a big role. I wish him the best of luck in his additional role at Cardiff City."
Dalman has previous involvement in football, having helped the Glazer family in their purchase of Manchester United.
