Mark Carney, a former investment banker who runs Canada's central bank, will become governor of the Bank of England in July, the British government announced Monday, a surprise pick that promises to bring change to the bank's insular culture at a time when it is gaining new regulatory powers in the U.K.

The bombshell announcement, which Chancellor of the Exchequer George Osborne delivered to Parliament Monday afternoon, represents a major break from tradition in the U.K., which...