Porter, who was the Nationals third base coach this season, replaces Brad Mills, who was fired last month. Porter will remain with the postseason-bound Nationals for the remainder of their season.
"I think he's going to push us to get better, he's going to push us to get better quickly, and he's going to shorten the time that it takes for us to get to where we want to be as an organization which is where the Houston Astros are competing year in and year out for division titles and championships," general manager Jeff Luhnow said.
Tony DeFrancesco has served as interim manager and will finish the season in that role.
Porter will lead the rebuilding effort of a young team that has the worst record in the majors, wrapping up its second straight 100-loss season. The Astros are in their first season under new owner Jim Crane and moving from the National League to the American League next year.
Luhnow and Crane flew to Philadelphia on Wednesday to offer Porter the job. He was not in Houston for the announcement because the Nationals play on Thursday night.
"He's putting together a great leadership team and I'm just honored to be a part of that leadership team," Porter said of Crane on a conference call.
Porter has been part of the quick reversal in Washington. The Nationals were 69-93 in 2010 and enter Thursday's games with the best record in the majors at 94-61.
"He's been part of the Nationals' ascent, and that's a model that we look at as the Astros to say we'd like to get to that point where we can go from a team that has a losing record to a team that can win a division and compete for a championship like the Nationals are in a position to do this year," Luhnow said.
As much as the Astros liked his experience with the Nationals, Porter likes that Houston is similar to Washington in that it is committed to building the team from within.
He went down a list of all the current stars for the Nationals who came up through their system.
"All of those guys are homegrown, and when you are able to grow your own talent and if they get to the big leagues and they are your core players, their level of commitment to the overall excellence of the organization runs a little bit deeper than players that come from the outside," he said. "That is a goal of this organization and one of the things that really drew me into this job."
With such an inexperienced team, the Astros wanted a charismatic leader to mold the players.
"He's an expert in specific areas of outfield and baserunning and fundamentals," Luhnow said. "When we talk about what we need for our clubhouse and our young players and our system, we need someone with a real specific expertise and emphasis on playing baseball the right way."
The Astros acknowledged that it is a bit odd to name Porter manager while his current team is still competing, but the Astros didn't want to wait until after the season to make this decision.
"Part of the strategy was to try and get out in front of this," Crane said. "Wednesday when the season is over there will probably be people looking for managers. I think it did give us an advantage of getting out in front of things."
The Astros appreciated the cooperation of the Nationals in this process.
"Bo Porter joined our staff in 2011 to instruct and coach our young players in how to play the game right, and in how to win," Nationals general manager Mike Rizzo said in a statement. "He has been invaluable to us and our drive toward our first postseason."
The 40-year-old Porter has previously worked as Arizona's bench coach and third base coach for the Marlins.
This will be Porter's first job as a major league manager, but he has managed in the minor leagues.
"He has an intuitive sense of game strategy," Luhnow said. "The people that have worked with Bo before say that he really has an innate ability to understand the game and understand the moves that need to be made and do the right thing."
After shedding all of their veterans over the last few seasons to restock the depleted farm system, the Astros know that it will take time to get back into contention. But they're hoping the process doesn't take too long.
"One of the reasons we're hiring Bo Porter is that we're not patient," Luhnow said. "We're working as hard as we can to minimize that time and make that time until we get to the playoffs as short as possible from where we are today. I think Bo Porter helps us accelerate that time."
Porter sees potential in Houston, and he also hopes improvement can be made quickly.
"It's a young group, and at the same time it's a very talented group," he said. "The talent pool is very deep and now we just need to roll up our sleeves and go to work."
Porter played football and baseball at Iowa before playing parts of three major league seasons with Texas, the Chicago Cubs and Oakland.