New Zealander Castle was announced as the new boss of Rugby Australia and will also become the first woman to oversee a major Australian sporting code.
The experienced sports administrator will take up her post in January, replacing Bill Pulver, whose contract was due to expire in February.
"Raelene is an extremely impressive executive who covered every base as far as what the board was looking for in a chief executive officer to lead our game into an important new chapter," said Rugby Australia chairman Cameron Clyne, who said Castle was the standout candidate from more than 200 applicants.
"She offers an incredible wealth of experience in sports administration and business, with an outstanding track record in commercial, marketing and communications roles."
Castle, who was born in Australia to Kiwi parents, was previously in charge of Netball New Zealand, as well as being the first female CEO of an Australian Rugby League club when she took over the Canterbury-Bankstown Bulldogs in 2013.
"I am especially looking forward to getting out into the rugby communities across Australia and meeting the diverse range of people that make the game tick," she told reporters at a news conference in Sydney.
She was, however, keen to downplay the significance of her gender.
"The reality is sport has gender equity in it," she added.
"There's people from both really delivering, particularly at grassroots level... so I don't think it's an enormous step to have a female chief executive, I'm excited about the opportunity."
Clyne added that Castle would bring a "fresh set of eyes" to rugby union in Australia, while Steve Tew, chief executive of New Zealand Rugby, called her appointment "a new era for international rugby".
"We congratulate Raelene on her appointment, which is an acknowledgement of her strength as a leader, and her ability to drive success both on and off the field," he said.
"I have known Raelene for a number of years, and have a huge regard for her and we are really looking forward to working with her."
Rugby union in Australia faces fierce competition from the four football codes -- Rugby League, Australian Rules Football and soccer -- and despite the national team's success it is often seen as a niche, middle-class sport, domestically.
"For many, rugby union is still a class-based game
-- and it hasn't been able to break these shackles," wrote Steve Georgakis, a senior lecturer at the University of Sydney, in 2015.