Fellow Irishman Norton will take the role in the 2009 contest, which will be hosted in Moscow.
Veteran presenter Sir Terry, 70, had cast doubt on whether he would be involved in covering the event again at this year's contest.
He said it was "no longer a music contest" and that prospects for Western European participants were "poor".
The show has been dogged by accusations of bloc voting, which was blamed by some for leaving Britain's 2008 contestant, Andy Abraham, with only 14 points.
Sir Terry, who has spent more than three decades guiding viewers through the contest, said he would be "sad to leave it all behind".
He said: "I've had 35 wonderful years commentating on the Eurovision for radio and television.
"From my first, in a small music-hall in Dublin, to my last, in the huge arena in Belgrade, it has been nothing but laughter and fun."
Norton, a long time Eurovision fan, described it as "an amazing job and a huge honour".
He said: "Sir Terry is nothing less than legend and is an impossible act to follow, but somebody must and I just couldn't say no.
"I can't wait to get to Moscow. With a combination of cheap vodka and a language barrier what could possibly go wrong?"
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