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Lord Williams, who served as head of the Church of England from 2002 to 2012, is also currently master of Magdalene College, University of Cambridge.
Speaking at an event in London on 17 June to mark his appointment, he said that he was “very, very proud” to be taking on the role.
The University of South Wales was created in April this year from the merger of the University of Glamorgan and the University of Wales, Newport.
Lord Williams explained that nearly a decade spent on the governing body of the latter institution had shown him “what it might mean for an institution of higher education really to engage at grass roots level with all kinds of people who didn’t have, perhaps, expectations of higher education”.
He said that in Wales “access and community ownership are all important” for higher education institutions.
“I really hope and pray that this new institution will live up to the riches of that heritage,” he said.
Lord Williams described the University of South Wales as an “expanding, confident, visionary and imaginative” venture.
He will take over from the current chancellor, Lord Morris of Aberavon, who will retire in late 2013.
Lord Williams was born and educated in Swansea, and is a Welsh speaker.
From 1977 to 1991, he worked as an academic and in various church positions at the universities of Cambridge and Oxford.
He then became Bishop of Monmouth and subsequently Archbishop of Wales before becoming the 104th Archbishop of Canterbury in 2002.