Stern, 57, will replace departing talk show host Piers Morgan on the panel when the talent show returns for a 7th season in the summer of 2012, broadcaster NBC said.
The shock jock, known for his sexually explicit interviews and foul language, will continue to host his daily radio program for SiriusXM and production of the television show will move to New York to accommodate Stern's radio schedule.
The naming of Stern drew sharp criticism from some groups and fans of the show. It was deemed "an act of desperation for a flailing network," by the Parents Television Council.
PTC president Tim Winter called Stern "a performer who is synonymous with shock, profanity and obscenity" who was not suitable for a prime-time network TV show watched by families.
Winter said NBC, which has languished for several years at the bottom of the four main U.S. TV networks, "risks losing millions in advertising dollars", suggesting the PTC would urge its members to pressure advertisers to pull their commercials.
A writer named slawson on People magazine's comment board posted: "AGT use to be my absolute favorite show. With Stern (YUCK!!!), I know I will no longer watch it. Wow...What was the network thinking. Taking a clean, fun, innocent show to have a "wannabe" porn king judging. Wow, just wow, seriously."
However, NBC reality programming chief Paul Telegdy said Stern's "larger-than-life personality will bring a thrilling new dynamic to 'America's Got Talent'."
Stern, whose raunchy humor and comments on religion and race have often landed him in hot water, will join judges Sharon Osbourne and Howie Mandel on the show which features performers ranging in age from children to seniors.
He told his radio listeners on Thursday that he would pull no punches with the young contestants, and their mothers.
"I am going to tell you your kiddie has no talent...this nonsense of Howie and Sharon putting through less than talented people has got to stop. Under my administration, there will be no Frank Sinatra impersonators winning," he said.
"I don't want to hurt anyone's feelings, but feelings are going to be hurt," Stern added.
"America's Got Talent," created by British entrepreneur Simon Cowell, is one of NBC's most successful shows and the outspoken Stern had been Cowell's top choice to join the judging panel.
The radio show host lobbied hard but unsuccessfully last year for a judge's spot on "American Idol".
Stern's new salary was not revealed but Forbes.com writer Jeff Bercovici estimated that he could get about $15 million and that NBC could spend some $10 million to move the show to New York.
Stern said that he was not joining "America's Got Talent" for the money. "I didn't do it for the money. I did it because I like the show and I need to be a judge. That's it," he said.
(Reporting by Jill Serjeant; editing by Bob Tourtellotte)
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