Taking over from Doug Howlett who retired in June, the 23-year-old O'Mahony is no stranger to the role and previously captained Munster during the 2011/12 season in Paul O'Connell's absence, and in doing so claimed the Munster Rugby Young Player of the Year award.
O'Mahony also captained Munster 'A' to the inaugural British & Irish Cup final in 2010 and has previously captained Ireland Under-18s and Under-20s.
With 46 Munster caps to his name, the Corkman made his league debut in January 2010 as a replacement against Ulster.
He then put in a man-of-the-match performance on his Heineken Cup debut against Northampton Saints in November 2011 and scored his first Munster try a week later against Castres Olympique. He has represented Ireland on sixteen occasions.
Commenting on the captaincy announcement, O'Mahony said: "It is the biggest honour of my career so far and it is very special to me.
"When I was asked by Rob (Penney) initially I was just shocked and my first instinct was to jump at it. But I had time to go away and think about it and I wanted to talk to people to get their thoughts.
"Fellas like Paulie (Paul O'Connell) are very important guys in this squad and hopefully he and the other guys will be behind me for the year and I'm really looking forward to it.
"I'm not going to try and fill Paulie's boots, Axel's (Anthony Foley's) boots or Dougie's, I'm going to try and be my own captain, look after the lads and figure out the way I'm going to do things.
"Captaining Ireland and your country is huge and obviously that experience will stand to me, but I'm just delighted with this opportunity now."
The province's head coach Rob Penney added: "Peter is a naturally gifted leader and is still very young but has a lot of the attributes that are special and intrinsic to Munster.
"He will grow into being a special leader of this group of men. I have spoken to players, including Paul O'Connell who was extremely supportive of Pete's appointment.
"We went through a process last year to appoint Dougie via the players and this year Peter's name was to the forefront of that list, so taking all that information on board it was a no-brainer that Pete would be appointed."