Rotheram, who also served as lord mayor of Liverpool in 2008 and 2009, will fight to lead a region covering Liverpool, St Helens, Knowsley, Sefton, Wirral and the Cheshire borough of Halton.
Incredibly humbled to be selected as Labour's candidate for Metro Mayor. Thank you to everybody who supported me. pic.twitter.com/QYFQXGIIId— Steve Rotheram (@MetroMayorSteve) August 10, 2016
The Liverpool Walton MP is a key ally of the Labour leader, and in winning the nomination he defeated fellow local MP Luciana Berger, who resigned as shadow mental health secretary in late June, saying that the party needed a leader who could unite the party.
Rotheram also bested the city's mayor Joe Anderson in a contest that saw voting among local party members close on Friday.
The region will chose its mayor next May, with the winner gaining responsibility for an annual investment of £30m for the next three decades.
The nomination comes after shadow home secretary Andy Burnham was named as Labour's candidate to become the first Greater Manchester mayor.
Burnham defeated interim Manchester mayor Tony Lloyd and Labour MP Ivan Lewis for the spot, and faces an election in May next year.
Labour MEP Sion Simons has been selected as the party's candidate for the West Midlands metropolitan area mayor.
Rotheram, Burnham and Simons are all hoping to follow in the footsteps of former Tooting MP Sadiq Khan, who became Labour's most senior elected politician as London's mayor earlier this year.