Edwards will anchor the BBC's coverage of Prince William and Kate Middleton's union at Westminster Abbey on April 29. It is estimated that the event could attract a worldwide audience of one billion people.
It was initially thought that Dimbleby would be the preferred choice for the event, as he previously handled the funerals of Princess Diana and the Queen Mother, along with the Queen's Golden Jubilee celebrations.
However, sources within the BBC have indicated that the 72-year-old is now viewed as a political anchor, after covering every general election for the BBC since 1979.
The role will be the biggest job of Edwards's career to date, dwarfing the 49-year-old's recent assignments such as the Trooping the Colour and the State Opening of Parliament.
"Huw has presented so many of the big national moments of recent years and he is the natural choice for the royal wedding," a BBC source told The Daily Telegraph.
Speaking last night, Welsh presenter Edwards said: "I am delighted with the news and consider it a great honour to play a part in what I am sure will be a huge national celebration.
"I felt something of an outsider for a long time. These days, the presence of a Welshman on the BBC's main evening news bulletin is not [in] question. In 1984, when I joined the BBC, attitudes were rather different."
Discussing the task of covering major events of public importance, Edwards said: "It is my firm belief that British viewer expect the BBC to maintain a certain formality when covering these occasions.
"Our job as broadcasters is to enhance the viewer's experience, not spoil it. Switch on the microphone only if you know exactly what you want to say. Speak if it helps the viewer's understanding. If in doubt, leave it out."
Details of the BBC's broadcasting plans for the royal wedding, including the full presenting lineup, will be revealed in early 2011.