12 Dec, 14:42
Prop Cian Healy is expected to miss the start of the 2014 RBS 6 Nations after undergoing surgery on his injured ankle on Wednesday.
Dallaglio was England captain immediately before Johnson, leading the team in 14 matches before newspaper allegations of recreational drug use, which he always denied, forced him to resign from the post in 1999.
In a statement, England coach Clive Woodward said: "I was in the fortunate position of having a lot of outstanding players to consider for the captaincy role, to follow in the footsteps of Martin Johnson who was always going to be such a hard act for any player to follow, both on the pitch and in his leadership qualities.
"Many players have proven to me they could do the job but in my opinion Lawrence is the stand out choice for Italy. I'm really pleased for him and I am confident he will be excellent in the role."
But Woodward stressed that his decision to appoint Dallaglio to the captaincy did not mean the 65-times capped forward was in permanent possession of the job.
"As always I will be appointing the captain on a game by game basis, a philosophy I've maintained since I've been in charge," Woodward said.
Meanwhile a delighted Dallaglio, whose father is Italian, said: "I'm very pleased to accept this responsibility. It's a huge honour and privilege and Martin has certainly set a high standard. He is a world class player and is a great loss to England but I respect his decision to retire," the British and Irish Lions star added.
"All teams move on and evolve and England is no exception. The priority is to get selected on form, that's paramount. I see playing well as the key to success and captaining your country is very special indeed.
"I want to continue to work closely with Clive and the coaches and take England to the next level. But we are under no illusions. As world champions it will be a huge challenge to achieve that goal but it's one I know we all share."
Meanwhile, veteran lock Fabien Pelous, who is to succeed Fabien Galthie as captain of France, was back in training Wednesday for his club Toulouse over three weeks after twisting a knee.
"It went well even if I'm a little short of breath," said Pelous after the two-hour session. His chances of recovering full fitness in time to turn out for France against Ireland in the Six Nations Championship on February 14th look to have improved after his trouble-free return to training.
He said: "I want to wait two days to see how it goes, but I'd say I'm 50-50 to play in the match (for his club Toulouse) on Saturday."
The 30-year-old, capped 86 times, has already said he wants to carry on to the 2007 World Cup.
Pelous captained France 15 times between 1997 and 2002 and took over from Galthie when the scrum-half was injured for the last three matches of the 2003 Six Nations.
Pelous picked up his injury minutes after coming on as a second half substitute against Biarritz on January 3. His return to the pitch will be welcome news to France head coach Bernard Laporte as he deals with a second row injury crisis for the Ireland match involving Olivier Brouzet, recovering from a collarbone operation, David Auradou, carrying a calf strain, and Jerome Thion, suffering from an Achilles tendon injury.
Pelous' club teammate, France centre Yannick Jauzion, also resumed training Wednesday after a calf injury. The three-try scorer for france against Fiji at the World Cup last year who was forced to sit out last weekend's game against Leeds in the European Cup said: "I didn't feel any adverse reaction. I'm ready for Saturday."