Once a rival for the top job, the California senator of Indian-Jamaican heritage had long been considered the front-runner for the position.
The former California attorney-general has been urging police reform amid anti-racism protests.
Mr Biden will face President Donald Trump in the election on 3 November.
Vice-President Mike Pence remains the Republican incumbent’s running mate.
Only two other women have been nominated as vice-presidential candidates – Sarah Palin by the Republican party in 2008 and Geraldine Ferraro by the Democrats in 1984. Neither made it to the White House.
A woman of colour has never been appointed to a presidential ticket by either of the two main American political parties. No woman has won the US presidency either.
Who is Kamala Harris?
Ms Harris, 55, dropped out of the presidential race in December.
She repeatedly clashed with Mr Biden during the primary election debates, most notably criticising his praise for the “civil” working relationship he had with former senators who favoured racial segregation.
The Democrat was born in Oakland, California to two immigrant parents: an Indian-born mother and Jamaican-born father.
She went on to attend Howard University, one of the nation’s preeminent historically black colleges and universities. She has described her time there as among the most formative experiences of her life.
Ms Harris says she’s always been comfortable with her identity and simply describes herself as “an American”.
In 2019, she told the Washington Post that politicians should not have to fit into compartments because of their colour or background. “My point was: I am who I am. I’m good with it. You might need to figure it out, but I’m fine with it,” she said.
Donald Trump reacts on twitter