Hirst succeeds Steve Richards, who left the agency at the end of March after Lace instigated a management change to the old Grey order.
Hirst, 32, is the final appointee to the new-look management board. He joins the former Bartle Bogle Hegarty employees Nicola Mendelsohn and Dylan Williams, who have been appointed to the positions of new-business and planning director respectively.
Their hiring came after Lace secured the former Mojo-Partners executive creative director, Dave Alberts, to take Grey London's creative helm.
Lace, 35, said he had been impressed with Hirst's performance for some time, and had previously been interested in employing him at TBWA\ London when he was the chief executive there.
"He's one of a handful of people in the industry who was clearly a managing director in waiting," Lace said.
The move sees Hirst reunited with Mendelsohn and Williams, with whom he had worked at BBH.
Hirst started his career in 1994 at Lintas but left after a year to join BBH. He left after four years to join Fallon as an account director in January 2000, and moved on to the Skoda account in July. He also worked on the BBC, and became the head of account handling in January 2002.
Hirst said leaving Fallon had been a difficult decision to make. "It was not about what Fallon could or could not offer me, but rather the opportunities on offer from Grey. We want to win more UK domestic business and raise the agency's creative profile, and I believe the team that Garry has in place can do this," he said.
Hirst is expected to start at the beginning of the summer.
"Chris has got himself a great big job and we are very proud of him," Michael Wall, a founding partner of Fallon, said.
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