Khosa was appointed after a weeklong consultation between Zardari and various political leaders, including Prime Minister Yousuf Raza Gilani, the Online news agency reported.
Following the assassination of then Punjab governor Salman Taseer Jan 4, several names of politicans had been considered for the appointment. Taseer was gunned down by one of his security guards in a posh market in Islamabad.
Guard Mumtaz Quadri, who immediately surrendered after the attack, said he killed him for opposing blasphemy laws. Khosa is one of the senior leaders of the ruling Pakistan Peoples Party (PPP).
Meanwhile, the opposition PML-N party (Pakistan Muslim League-Nawaz) has welcomed the government's decision to appoint Khosa as Punjab governor.
PML-N information secretary Ahsan Iqbal said that the appointment of the governor was purely the prerogative of the Federal government.