Walsh will step down from the Board on September 2013 following the Annual General Meeting and will retire from Diageo following a period of transition on June 30 2014.
Menezes is a member of the Board and has been chief operating officer of Diageo since March 2012, a role in which he oversees the commercial operations of Diageo globally.
Prior to his appointment as COO, Menezes was president and CEO of Diageo North America for eight years. During this period he was also made chairman, Asia Pacific from October 2008 and chairman, Latin America & the Caribbean from July 2011.
Menezes joined Diageo in 1997 and held various senior management positions with Guinness and then Diageo until 2004 when he was appointed President of Diageo Venture Markets.
Walsh's last 12 months will be focused on “transitioning critical partner and external relationships to Ivan”, including “relationships essential to recent acquisitions”.
Franz Humer, chairman of Diageo said: “Paul is an outstanding chief executive. He has served our business, its shareholders, employees and partners with enormous imagination and dedication over the past 13 years.
"I know he is justly proud of Diageo and its people and he leaves a great legacy for his successor. The Board is immensely grateful for his ambitious and thoughtful stewardship of the business and its people. The transition process which has been put in place enables Paul to contribute his knowledge and experience during Ivan’s first year as Chief Executive Officer."
Speaking of the CEO in waiting, Humer said: “We are delighted to have a leader of Ivan’s talents and global experience to succeed Paul. The handover is being made at a time when the business is strong and Ivan takes on the role of CEO at an exciting stage of the company's global development.
“The Board is confident that Ivan will inspire our organisation and Diageo will continue to achieve our medium-term performance objectives."