Hockney replaces David Kester, who is leaving after nine years to head the Design Council, where he will work on building the charity's business and education remit.
Hockney started his career in advertising as a planner at J. Walter Thompson before moving to BMP to work with John Webster on the launch of Channel 4. He later left to set up BDDH in 1987.
He left BDDH in 1994 to take the top job at the auction house Christie's.
Alongside his agency experience, Hockney was also the chairman of the IPA Advertising Effectiveness Awards for ten years and worked with the Ministry of Defence designing an Army Foundation College for 16-year-olds.
He was also the executive director of members, communication and research at the Institute of Chartered Accountants until 2001.
The president of D&AD, Michael Johnson, said: "It is a mark of how far D&AD has progressed that someone of Michael's stature is taking on the role of chief executive. Not only is he passionate about the arts, design and creativity, he has also worked in education. His vast experience will undoubtedly help build on D&AD's business remit."
The IPA's director-general, Hamish Pringle, added: "Given that one of the purposes of D&AD is to champion the effectiveness of creativity, Michael's experience means he is perfect for the job. He ticks all our boxes."