Ms Alley takes over from Tim Cadogan who resigned the position, which he had held since 2016.
Mr Cadogan has moved to Wellington for work and resigned within a year of the next local body election so there would be no need for an election to fill his role.
Ms Alley (39) is a second term councillor and was the only nomination for the position at a council meeting this morning.
She is the first woman to hold the mayoralty in Central Otago.
She holds the role as chairwoman of Local Government New Zealand zone 6, the only zone chairman or woman in the country who is neither mayor nor deputy mayor.
Zone 6 covers all councils from Waitaki south: the Dunedin and Invercargill city councils, the Queenstown Lakes, Southland, Waitaki, Clutha, Gore and Central Otago district councils, the Otago Regional Council and Environment Southland.
She is married with three children.