Graying, who was previously leader of the House of Commons, will have responsibility for making a decision on whether Heathrow or Gatwick should be allowed to expand.
The Airports Commission last year recommended that Heathrow should be given the green light to build a third runway.
Grayling, who is the MP for Epsom and Ewell and campaigned for Brexit, has previously been tight-lipped about his views on the controversial airports issue.
A decision on airport expansion had been due this summer. But that was put back to the autumn to allow the election of a new Conservative leader and prime minister – a process that was curtailed earlier this week when one of the two final candidates Andrea Leadsom dropped out of the race.
As part of new prime minister May’s first cabinet, former transport secretary Patrick McLoughlin has moved to the position of chairman of the Conservative Party.
McLoughlin had been appointed as transport secretary in May 2012 taking over from Justine Greening and retained this role following last year’s general election.
Grayling becomes new transport secretary
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