Sir Peter's appointment was confirmed this afternoon by Sir Brian Pitman, the interim non-executive chairman of ITV who heads the nominations committee.
Sir Peter will work closely with ITV chief executive Charles Allen who the City would like to see reined in. Allen has been criticised for not cutting enough costs.
Sir Peter's name had already been approved by the City, which has been heavily critical of ITV, and was welcomed by Fidelity, ITV's biggest shareholder.
The powerful Fidelity fund manager Anthony Bolton, dubbed the City's "quiet assassin" who led the coup that ousted Carlton chairman Michael Green, is also thought to want to remove Allen.
He was reported to have been courting Greg Dyke for the role of ITV chief executive.
Sir Peter said: "ITV is an exciting and vibrant business. It is having its best on-screen year-on-year performance for 10 years and there is a clear strategy in place, which is beginning to show results. I am looking forward to working with Charles Allen and the management team to take this strategy forward to realise ITV's enormous potential."
Other candidates connected with the ITV chairman's job include Sir Chris Gent, the former Vodafone chairman, and investment banker John Nelson.
Sir Peter stood down as chief executive of HBOS last year. Following the merger of the Royal Bank of Scotland and Halifax in 2001, Burt became deputy chairman and was later made chief executive of the combined group.
His experience of seeing through a major merger will stand him in good stead as ITV begins its first year as a single company. He is also currently chairman of the UK arm of US investment bank Gleacher Shacklock and a former non-executive director of oil giant Shell.
Sir Brian said: "Peter's experience of generating value speaks for itself and I am delighted to welcome him to ITV. I have no doubt that his leadership and guidance will be enormously beneficial to both the merger process and the resurgence of ITV as a major force in UK television. This is an excellent appointment and another significant milestone for ITV."
Sir Peter began his career in 1968 at Hewlett Packard in Palo Alto, California, and returned to the UK in 1970 to join Conversational Software and then Edward Bates & Sons, both based in Edinburgh, before joining Bank of Scotland in 1975.
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