Bentley joins the country's largest water and wastewater services provider from Severn Trent, where she previously held the position of the chief customer officer.
Thames Water, which named Ian Marchant as its interim executive chairman last May, said Marchant will revert to his role as chairman once Bentley joins the company.
"Our board has conducted a thorough search to find the best candidate to fill this important role, and we're delighted to have secured someone of Sarah's calibre," Marchant said.
Prior to Severn Trent, Bentley held the position of the managing director at Accenture's digital business unit in the UK and Ireland, and as the chief executive officer of Datapoint, a private equity-backed company.
Sky News had first reported Bentley's appointment on Tuesday.
(Reporting by Samantha Machado in Bengaluru; editing by Uttaresh.V and Sherry Jacob-Phillips)