Tendulkar, 23, will be India's second-youngest captain after "Tiger" Mansur Ali Khan Pataudi, who was made captain at the age of 21.
"We felt Azharuddin's performance as captain was not up to the mark for the last couple of series," Gundappa Viswanath, the chairman of India's selection committee, said.
Azharuddin recently led India on their tour of England when they were beaten 1-0 in the three-Test series, and he was also captain when they lost in the semi-finals of the World Cup played in India, Sri Lanka and Pakistan earlier this year.
Azharuddin, 33, led India to victory in 11 out of the 37 test matches in which he was captain - more than any other Indian captain - but has been troubled by poor batting form and pressures in his personal life.
Tendulkar, who made his Test debut at 16, will make his first appearance as captain in the four-nation Singer Cup starting in Sri Lanka later this month.
Azharuddin said he would extend full support to Tendulkar if he was retained in the side.Reuse content