Yorston, currently the society's chief operating officer will officially take the reins from 1 October 2012 .
The announcement comes as Principality reports a strong performance for the first six months of 2012, growing savings balances by £167.8m to an all time high of over 5.18bn.
Principality chairman, Dyfrig John, said: "The society has successfully weathered the economic climate and has emerged in excellent shape for the next stage of strategic development under Graeme's stewardship.
“Principality needs a Chief Executive with an in-depth knowledge of the UK Market, the consumer and our members. A strong understanding of the society's diversified operating model and a deep commitment to the philosophy of mutuality are also qualities the board required.
“Graeme undoubtedly possesses all of these attributes, together with a strong commercial focus. I am confident he will make an outstanding chief executive."
Yorston said: "This continues to be a time of change and reform for the financial services industry but I believe that there exists an unequivocal opportunity for the mutual sector to deliver a differentiated service in the current climate.
“Principality has at its roots a traditional, prudent ethos that is focussed on putting members and customers at the heart of the business and this stands us in good stead.
“Over the last decade the Society has made astounding progress, modernising the way we do business to improve our customer experience and offer the level of service that people demand, while maintaining the financial security necessary to deliver this.
"With the continued support of the society's strong and capable executive management team, staff and members, I look forward to building on this success, ensuring that Principality continues to play a pivotal role in the financial lives of the people of Wales and beyond."
With over 38 years' experience in financial services, Yorston joined Principality as chief operating officer in July 2006, accountable for all of the building society operations including distribution, marketing, IT and customer services. As well running the core building society, Yorston is a member of the executive building society management, group risk and asset and liability committees. He is also director of Principality group businesses, including subsidiary companies Nemo and Peter Alan Estate Agents. He was appointed to the main board in October 2007.
Previously, Yorston held a number of senior roles at Abbey National, including, regional director for branches, director of sales for the call centres and IT Director for the retail bank. During this time, he led a number of significant strategic change programmes including one of the largest customer relationship management implementations in Europe.
As well as being a Fellow of the Chartered Institute of Bankers, Yorston also holds a masters degree in business administration from Warwick Business School.
He became HRH Prince of Wales Ambassador for Business in the Community (BITC) Wales in 2010- a post that he continued throughout 2011. He is a member of the Board of BITC in Wales.
Peter Griffiths added: "I have worked alongside Graeme for the past six years. He is well known to the board, staff and Members and I am delighted to be leaving the society in his safe and capable hands. I extend my thanks, once again to all those who have supported me over the last decade including past and current chairmen, my board, a loyal and dedicated team and a supportive set of members. I look forward to the next chapter in my personal career, wherever that may take me, safe in the knowledge that Principality will continue to prosper in the years ahead."
