He will take up the post in Cambridge in October 2011.
Professor Toland has been Professor of Mathematics at the University of Bath since 1982 and was awarded the Vice-Chancellor's Research Medal at the Winter Graduation Ceremony in December 2010.
Professor Glynis Breakwell, Vice-Chancellor of the University of Bath, said: "John Toland has made an outstanding contribution to the University of Bath over almost three decades. His appontment to this presitigous post is a testimony to his outstanding research contribution and also signals the high regard and reputation of mathematics here at Bath. I am sure all colleagues will join me in wishing him well in this new appointment."
Professor Toland said: "The Isaac Newton Institute for Mathematical Sciences is one of the world's leading research centres in its field, and I feel fortunate indeed to be joining it as Director. This is a great responsibility, especially in the changing circumstances now facing universities nationally and with increasingly severe competition from abroad.
"My time at the University of Bath has been immensely fulfilling. Moving to Cambridge now and working with excellent colleagues at the Newton Institute will present exciting challenges and new opportunities that I am looking forward to very much."
Professor Toland's research interests include mathematical analysis and nonlinear partial differential equations, and he has made substantial contributions to the rigorous theory of steady water waves. In 1978, he proved Stokes' conjecture on the existence of gravity waves of maximum height on deep water, a previously open problem in mathematical hydrodynamics which dated back to the 19th century.
Between 2002 until 2010, at the same time as working for the University of Bath, Professor Toland was Scientific Director of the International Centre for Mathematical Sciences (ICMS) in Edinburgh. He held an EPSRC Senior Research Fellowship from 1997-2002. He was elected Fellow of the Royal Society in 1999, and of the Royal Society of Edinburgh in 2003, and served as President of the London Mathematical Society from 2005 to 2007.
In 2010, he was appointed Chair of the Mathematical Sciences panel for the Research Excellence Framework by the Higher Education Funding Council for England. He is a member of the Executive Committee of the International Mathematical Union (IMU), the non-governmental body for the promotion of co-operation in mathematics world wide.
The Isaac Newton Institute for Mathematical Sciences is a national and international visitor research institute. It runs research programmes on selected themes in mathematics and the mathematical sciences with applications over a wide range of science and technology. It attracts leading mathematical scientists from the UK and overseas to interact in research over an extended period.