Armstrong, who was Google's president of North American sales, has been named chief executive at AOL.
The appointment comes as the company looks to strengthen its position in the online advertising market.
Other changes at AOL include the departure of Randy Falco and Ron Grant, who held the titles of chief executive and president respectively.
They leave the company after a difficult 2008, which has been marred by a substantial drop in online ad sales and the $850m acquisition of social networking site Bebo for which the company admitted it overpaid.
In January the company announced it would slash 700 jobs, or about 10% of its workforce.
Armstrong said he plans to immediately focus on growing AOL's online advertising business, which includes everything from display and text ads to integrated campaigns via its advertising hub, Platform A.
Armstrong is largely credited for building Google into the market leading juggernaut it is today by developing its AdSense and AdWords platforms.
Google and AOL have a history of affiliation, last year Google paid $1bn for a 5% stake in AOL, which included rights to serve AdWords ads on AOL's network of websites.
Armstrong declined to comment whether further tie-ins, with Google or other potential suitors including Yahoo!, News Corporation and Microsoft are on the horizon for AOL.
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