Fallon is taking over in spring 2014, moving the show to New York
Lorne Michaels, who executive produces "Late Night With Jimmy Fallon" and gave him his big break on "Saturday Night Live" in 1998, will take over as executive producer of "Tonight," which will tape at 30 Rockefeller Plaza, the home of "SNL."
NBC said it also making plans for Fallon's current timeslot, 12:35 a.m.
The takeover comes earlier than many predicted: The New York Times reported that Fallon would replace Leno by fall of next year.
Leno has hosted the show since 1992, with only a brief interruption when Conan O'Brien hosted.
"Congratulations Jimmy," said Leno. "I hope you're as lucky as me and hold on to the job until you're the old guy. If you need me, I'll be at the garage.”
Said Fallon: "I'm really excited to host a show that starts today instead of tomorrow."
The two hosts sang a duet on Fallon's "Late Night" on Monday that poked fun at the speculation surrounding their shows. The collegiality between Leno and Fallon suggests that this transition will go more smoothly than the last attempt to replace Leno at "Tonight."
NBC's five-years-in-the-making plans to give "Tonight" to O'Brien were dashed in the 2009-10 season in one of the most high-profile debacles in the history of television.
To make room for O'Brien, Leno was moved to 10 p.m. each weeknight and underperformed in the timeslot. He then signaled that he would be willing to return to the 11:35 slot, and O'Brien opted to leave NBC rather than accept a move to 12:05.
Two decades ago, NBC lost David Letterman to CBS after a dispute over whether he or Leno would inherit "Tonight" from Johnny Carson.
In a way, it's a different Jimmy who is ejecting Leno from "Tonight."
Jimmy Kimmel, a fierce critic of Leno's handling of the O'Brien mess, moved to 11:35 p.m. in January, putting him in direct competition with Leno and Letterman.
Leno continued to win in late night in all the key demographics and in total viewers. But Kimmel took a narrow lead in viewers 18-34, leading NBC to fear that ABC's "Jimmy Kimmel Live" could become the top show in late night in the years and perhaps decades to come.
NBC hopes Fallon will be able to keep Kimmel from claiming a stranglehold on younger viewers.
"We are purposefully making this change when Jay is number one, just as Jay replaced Johnny Carson when he was number one," said NBCUniversal CEO Steve Burke. "Jimmy Fallon is a unique talent and this is his time."
Burke also said Fallon would take as the sixth host of "The Tonight Show" at the same time NBC covers next year's Winter Olympic Games from Sochi, Russia. That will allow NBC to heavily promote the show when viewership is high.
Fallon, who will be the sixth host of "Tonight," will take over the show businesss institution show as it enters its 60th year. Steve Allen was the host of the show when it debuted in 1954. Carson, the longest-serving host, led the show from 1962 to 1992.
He moved the show from 30 Rock to Burbank in 1972.