Nilsson, 38, served as vice-captain under Walker at St Pierre, Chepstow, in September when America's women, who were 9-7 behind going into the the last day of singles, fought back to win 17-11.
Walker had been captain since the inaugural match in 1990, leading Europe to victory at Dalmahoy two years later, but after two defeats since then she said: "I think four is enough."
Nilsson's first match in charge will be in 1998 at Muirfield Village, Ohio, scene of Europe's first Ryder Cup triumph on American soil nine years ago.
"I'm very excited and looking forward to working with Europe's best women professional golfers," she said. "Mickey Walker has been very generous and unselfish in the way she has shared her experiences as a captain with me over the last year and a half. I really appreciate that and it makes it easier for me to get started."
Walker said: "I am absolutely delighted that Pia has been appointed. There is no question that she is the best person for the job and I wish her every success."
Currently head coach to the Swedish national team's programme, Nilsson is a former member of the European women's tour Board of Directors and served on the American tour's player council during four years there.
This year's European side contained four Swedes - Annika Sorenstam, Lotta Neumann, Helen Alfredsson and Catrin Nilsmark - and there is a good chance that in 1998 there will be more. Sorenstam's sister, Charlotta, finished 11th on the Order of Merit this season, one place ahead of Sophie Gustafson.
Sweden are also looking to host the match in the year 2000 and Nilsson is expected to still be captain then.
n Karrie Webb, the US LPGA Rookie of the Year, will be aiming for her first tournament victory in her homeland when the Australian Open begins today at Yarra Yarra. Webb, 21, won the British Open in 1995 and three tournaments in her debut year in the United States, but has never won an event in Australia. She said she would not allow the expectations of Australian fans to put her under pressure during the event. "I love playing in Melbourne and I love playing at Yarra Yarra," Webb said yesterday. "I have great feelings here. I've played well every time I've played here."Reuse content